WorksheetsWeek 11 - Business Finance - 24 March 2020
Total questions: 35
Worksheet time: 18mins
The rate at which the value of an investment grows is called the:
required return.
dividend yield.
capital return.
capital gains yield.
The market in which new securities are originally sold to investors is called the _____ market.
primary
secondary
open
free
The market where one shareholder sells shares to another shareholder is called the _____ market.
primary
secondary
open
free
The current price of a share is based:
primarily on the future value of the cash flows derived from the stock.
solely on the anticipated future dividends.
on the present value of all the future cash flows from that stock.
strictly on the anticipated future stock price.
Which of the following statements is TRUE, according to the constant growth model?
The higher the discount rate, the lower the stock price.
The higher the holding period, the higher the stock price.
The growth rate should be larger than the discount factor.
The value of a stock depends on the holding period of an investor.
Short-term assets and short-term liabilities are referred to as the firm's:
cash flow.
capital budget.
capital structure
working capital.
A business organisation that is similar to a sole proprietorship but has two or more owners is called a:
limited liability company.
corporation.
dual company.
partnership.
Which ONE of the following relates to the ability of a business to pay its debts as they fall due?
growth
liquidity
efficiency
profitability
Which of the following is a type of short-term external source of funds?
leasing
overdraft
mortgages
debentures
Retained Profits is an example of:
Internal Finance
External Finance
Unsensible Finance
Long-Term Finance
Short-term finance includes:
Bank Overdraft
Trade Credit
Debt Factoring
Mortgage
Bank Load
Debt Factoring is:
Selling invoices to a factoring company.
Factoring the amount of debt you have into your business plan.
Writing off the debt that a business owe you.
Making plans for the future of the business.
Which ONE of the following items would be found in the income statement of a business?
equipment
investments
gross profit
accounts payable
A business has current liabilities of $200 000 million and current assets of $250 000 million.
Which of the following statements correctly describes the position of the business?
The business has a current ratio of 0.8:1 and has a liquidity problem
The business has a current ratio of 1.25:1 and has a liquidity problem
The business has a current ratio of 0.8:1 and does not have a liquidity problem
The business has a current ratio of 1.25:1 and does not have a liquidity problem
What are the owners of private and public limited companies called?
Stakeholders
Managers
Board of directors
Shareholders
Which of the following is a drawback for an entrepreneur setting up a business as a sole trader?
Profit is shared
Financial accounts are kept private
Limited liability
Unlimited liability
Which type of legal structure is used when two or more people join together to start a business and have unlimited liability?
Sole trader
Partnership
LTD
PLC
revenue
A person who is not necessarily the owner of the business but has a stake on how the business is performing is called __________.
stakeholder
stockholder
partners
manager
One of the financial institutions that operates by collecting premiums from clients is called ____________ .
brokerage
credit union
investment banks
insurance companies
