Financial Management

As a part of its capital structure, 'Venus Ltd 'had R.s 50 Lakh as equity share capital and a loan of R.s 20 Lakh from neon bank. On earning a good profit, Venus Ltd decided to give a good profit, Venus Ltd decided to give dividend to the equity shareholders but were surprised when the neon bank imposed restrictions on the payment of dividend.

The factor affecting dividend decisions which allows neon bank to impose restrictions on the payment of dividend by Venus Ltd is ____________.

• contractual constraints

• Legal constraints

The primary goal of financial management is

• to maximize the return

• to minimize the risk

• to maximize wealth of owners

• to maximize profit

Market value of shares are decided by

• the respective companies

• the investment market

• the government

• the shareholders

Capital budgeting related to

• long term assets

• short term assets

• long term assets and short term assets

• fixed assets

1. Investment can be defined.

• Person’s dedication to purchasing a house or flat

• Use of capital on assets to receive returns

• Usage of money on a production process of products and services

• Net additions made to the nation’s capital stocks

Dividend decision is concerned with

• only distribution of dividend to shareholders

• how much to be retained in business

• how much profit earned is distributed to shareholders and how much to be retained in the business

• none of the above

Suppose there are two projects ,A and B (with the same risk involved) ,with the rate of return of 10% and 12% respectively, then under the normal circumstance, ________ project to be selected

• project A

• project B

Financial management aims at

• ensuring availability of enough funds

• reducing the cost of funds procured

• effective deployment of funds

• all of the above

A long term investment decision is called

• working capital decision

• capital budgeting decision

• financial decision

• dividend decision

A decision to acquire a new and modern plant to upgrade an old one is a

• financing decision

• working capital decision

• investment decision

• none of the above