WorksheetsCorporate Finance and Policy
Total questions: 25
Worksheet time: 13mins
EBIT stands for
Earnings before Interest and Tax
Earnings before Interest and Tariff
Earn before Interest and Tax
Earnings before Investment and Tax
External sources of funds are
(A) Funds from long term loans
(B) Sale of fixed assets
(C) Both (A) and (B)
(D) None of the above
BANK OVERDRAFT IS A FORM OF
SHORT TERM FUNDS
LONG TERM FUNDS
BOTH
NONE OF THE ABOVE
Financial management is mainly concerned with
All aspects of acquiring and utilizing financial resources for firms activities
Arrangement of funds
Efficient Management of every business
Profit maximisation
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 is influenced by
financing decision
investment decision
dividend decision
financial 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
In a financial market, the price to borrow money is called the?
Deposit
Interest Rate
Credit
Cost
Which of the following can't be a Capital Structure?
Equity + Debentures
Equity only
Preference Shares only
Equity + Preference
Which is the cheapest Source of Finance
Debt
Equity
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
A firm should use .............. when evaluating an investment
the least costly source of financing
the most costly source of financing
the weighted average cost of all financing sources
the current opportunity cost
A firm has common stock with a market price of $25 per share and an expected dividend of $2 per share at the end of the coming year. The growth rate in dividends has been 5%. The cost of the firm's commonstock equity is
5%
8%
10%
13%
What are the components of capital structure
Debts and equity
Debts, preference shares and equity
Debts, revenue and equity
None of the above
Optimal capital structure consists of both the mix of debt and equity
True
False
Identification of investment proposals is the first step in capital budgeting process
True
False
Capital budgeting related to
long term assets
short term assets
long term assets and short term assets
fixed assets
Portion of Profit distributed to the shareholder is
Interest
Dividend
Tax
Earnings
The cost of raising finance is
promotion cost
venture cost
sinking cost
floatation cost
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
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
_________ involves increasing the proportion of debt and preference shares in total capital.
Trading on equity
Capital Budgeting
Financing decision
Financial Analysis
Replacement of machinery is an example of...
Growth of business
Change in technique
Technological Upgradation
The process of calculating present value of future cash flows
compounding
discounting
both compounding and discounting
none of the above
