Financial management Archives

41. A major difference between real and nominal returns is that_______________.

real returns adjust for inflation and nominal returns do not

real returns use actual cash flows and nominal returns use expected cash flows

real returns adjust for commissions and nominal returns do not

real returns show the highest possible return and nominal returns show the lowest possible return

Detailed SolutionA major difference between real and nominal returns is that_______________.

42. Future value of interest if it is calculated once a year is classified as

One time compounding

annual compounding

semi-annual compounding

monthly compounding

Detailed SolutionFuture value of interest if it is calculated once a year is classified as

43. Yield of interest rate which is below than coupon rate, this yield is classified as

yield to maturity

yield to call

yield to earning

yield to investors

Detailed SolutionYield of interest rate which is below than coupon rate, this yield is classified as

44. If a firm has no preference share capital, financial break-even level is defined as equal to:

EBIT

Interest liability

Equity dividend

Tax liability

Detailed SolutionIf a firm has no preference share capital, financial break-even level is defined as equal to:

45. The return relative solves the problem of______________.

inflation

negative returns

interest rates

tax differences

Detailed SolutionThe return relative solves the problem of______________.

46. Prices of bonds will be increased if interest rates

equals

lump sum declines

rises

declines

Detailed SolutionPrices of bonds will be increased if interest rates

47. Periodic rate if it is multiplied with per year number of compounding periods is called

extrinsic rate of return

intrinsic rate of return

annual rate of return

nominal annual rate

Detailed SolutionPeriodic rate if it is multiplied with per year number of compounding periods is called

48. In order to calculate EPS, Profit after Tax and Preference Dividend is divided by:

MP of Equity Shares

Number of Equity Shares

Face Value of Equity Shares

None of the above

Detailed SolutionIn order to calculate EPS, Profit after Tax and Preference Dividend is divided by:

49. The company’s cost of capital is called ________.

Leverage

Hurdle rate

Risk rate

Return rate

Detailed SolutionThe company’s cost of capital is called ________.

50. Other factors held constant, greater project liquidity is because of

less project return

greater project return

shorter payback period

greater payback period

Detailed SolutionOther factors held constant, greater project liquidity is because of

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