Financial Management
471. If a firm has no debt, which one is correct?
- OL is one
- FL is one
- OL is zero
- FL is zero
Correct answer: (B)
FL is one
472. If a firm has no Preference share capital, Financial Break even level is defined as equal to -
- EBIT
- Interest liability
- Equity Dividend
- Tax Liability
Correct answer: (B)
Interest liability
473. In case of Net Income Approach, the Cost of equity is:
- Constant
- Increasing
- Decreasing
- None of the above
Correct answer: (A)
Constant
474. Which one is true for Net Operating Income Approach?
- VD = VF - VE
- VE = VF + VD
- VE = VF - VD
- VD = VF + VE
Correct answer: (C)
VE = VF - VD
475. Which of the following assumes constant kd and ke?
- Net Income Approach
- Net Operating Income Approach
- Traditional Approach
- MM Model
Correct answer: (A)
Net Income Approach
476. Which of the following is incorrect for NOI?
- k0 is constant
- kd is constant
- ke is constant
- kd & k0 are constant
Correct answer: (C)
ke is constant
477. Dividend irrelevance argument of MM Model is based on:
- Issue of Debentures
- Issue of Bonus Share
- Arbitrage
- Hedging
Correct answer: (C)
Arbitrage
478. In case of Gordon's Model, the MP for zero payout is zero. It means that
- Shares are not traded
- Shares available free of cost
- Investors are not ready to offer any price
- None of the above
Correct answer: (C)
Investors are not ready to offer any price
479. Which of the following generally not result in increase in total dividend liability ?
- Share-split
- Right Issue
- Bonus Issue
- All of the above
Correct answer: (A)
Share-split
480. Stock split is a form of
- Dividend Payment
- Bonus Issue
- Financial restructuring
- Dividend in kind
Correct answer: (C)
Financial restructuring