Financial Management
511. At Indifference level of EBIT, different capital have
- Same EBIT
- Same EPS
- Same PAT
- Same PBT
Correct answer: (B)
Same EPS
512. Which of the following is true for Net Income Approach?
- Higher Equity is better
- Higher Debt is better
- Debt Ratio is irrelevant
- None of the above
Correct answer: (B)
Higher Debt is better
513. In MM-Model, irrelevance of capital structure is based on:
- Cost of Debt and Equity
- Arbitrage Process
- Decreasing k0
- All of the above
Correct answer: (B)
Arbitrage Process
514. The Traditional Approach to Value of the firm m that:
- There is no optimal capital structure
- Value can be increased by judicious use of leverage
- Cost of Capital and Capital structure are m dent
- Risk of the firm is independent of capital structure
Correct answer: (B)
Value can be increased by judicious use of leverage
515. If a firm has ke > r the Walter's Model suggests for
- 0% payout
- 100% Payout
- 50% Payout
- 25% Payout
Correct answer: (A)
0% payout
516. MM Model of Dividend irrelevance uses arbitrage between
- Dividend and Bonus
- Dividend and Capital Issue
- Profit and Investment
- None of the above
Correct answer: (B)
Dividend and Capital Issue
517. Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is
- 5
- 4
- 80
- 50
Correct answer: (B)
4
518. Which of the following is not a type of dividend payment?
- Bonus Issue
- Right Issue
- Share Split
- Both (B) and (C)
Correct answer: (C)
Share Split
519. Difference between between the bank balance as per Cash Book and Pass Book may be due to:
- Overdraft
- Float
- Factoring
- None of the above
Correct answer: (B)
Float
520. Which of the following is not true of cash budget ?
- Cash budget indicates timings of short-term borrowing
- Cash budget is based on accrual concept
- Cash budget is based on cash flow concept
- Repayment of principal amount of law is shown in cash budget
Correct answer: (B)
Cash budget is based on accrual concept