Financial Management

This decision is about the quantum of finance to be raised from various long-term sources.

• Investment decision

• Financing decision

• Dividend decision

• Capital budgeting decision

The inability of a business to meet its fixed financial obligations, like payment of interest, is known as

• Business risk

• Financial risk

• Long-term risk

• Market risk

The overall financial risk depends upon the

• Proportion of debt in the total capital

• Proportion of equity in the total capital

• Both of the above

• None of the above

This decision determines the overall cost of capital and the financial risk of the enterprise

• Dividend decision

• Capital budgeting decision

• Investment decision

• Financing decision

Which of the following sources of capital should not be selected by a business if its fixed cost is high?

• Equity shares

• Preference shares

• Debentures

• All of the above

When the stock market index is rising, a company may issue ___________ in order to meet its financial requirements.

• Debentures

• Bonds

• Equity shares

• None of the above

Name the financial decision which relates to disposal of profits.

• Investment decision

• Financing decision

• Dividend decision

• Capital budgeting decision

Under which of the following circumstances a company is NOT likely to declare a higher dividend?

• When the earnings of the company are high

• When a company has a lucrative forthcoming business opportunity(Growth opportunity )

• When the cash flow position of the company is strong

• None of the above

A company is likely to declare higher dividends if

• Tax rates are high

• Tax rates are relatively lower

• Tax rate has no effect on dividend declaration

• None of the above

It is essentially the preparation of a financial blueprint of an organisation’s future operations.

Identify the related concept.

• Financial management

• Financial planning

• Capital budgeting decisions

• Dividend decision