Financial Management

341. Which of the following represents passive dividend policy?

  1. that dividend is paid as a % of EPS
  2. that dividend is paid as a constant amount
  3. that dividend is paid after retaining profits for reinvestment
  4. all of the above
Correct answer: (C)
that dividend is paid after retaining profits for reinvestment

342. Dividend Distribution Tax is payable by

  1. Shareholders to Government
  2. Shareholders to Company
  3. Company to Government
  4. Holding to Subsidiary Company
Correct answer: (C)
Company to Government

343. 'Constant Dividend Per Share' Policy is considered as:

  1. Increasing Dividend Policy
  2. Decreasing Dividend Policy
  3. Stable Dividend Policy
  4. None of the above
Correct answer: (C)
Stable Dividend Policy

344. Which of the following is not relevant for dividend payment for a year ?

  1. Cash flow position
  2. Profit position
  3. Paid up capital
  4. Retained Earnings
Correct answer: (D)
Retained Earnings

345. Concentration Banking helps in

  1. Reducing Idle Bank Balance
  2. Increasing Collection
  3. Increasing Creditors
  4. Reducing Bank Transactions
Correct answer: (B)
Increasing Collection

346. Baumol's Model of Cash Management attempts to:

  1. Minimise the holding cost
  2. Minimization of transaction cost
  3. Minimization of total cost
  4. Minimization of cash balance
Correct answer: (C)
Minimization of total cost

347. Ageing schedule incorporates the relationship between

  1. Creditors and Days Outstanding
  2. Debtors and Days Outstanding
  3. Average Age of Directors
  4. Average Age of All Employees
Correct answer: (B)
Debtors and Days Outstanding

348. Out of the following, what is not true in respect of factoring?

  1. Continuous Arrangement between Factor and Seller
  2. Sale of Receivables to the factor
  3. Factor provides cost free finance to seller
  4. None of the above
Correct answer: (C)
Factor provides cost free finance to seller

349. In response to market expectations, the credit pence r j been increased from 45 days to 60 days. This would result in

  1. Decrease in Sales
  2. Decrease in Debtors
  3. Increase in Bad Debts
  4. Increase in Average Collection Period
Correct answer: (D)
Increase in Average Collection Period

350. Which of the following is related to Receivables Management?

  1. Cash Budget
  2. Economic Order Quantity
  3. Ageing schedule
  4. All of the above
Correct answer: (C)
Ageing schedule
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