Financial Management

511. At Indifference level of EBIT, different capital have

  1. Same EBIT
  2. Same EPS
  3. Same PAT
  4. Same PBT
Correct answer: (B)
Same EPS

512. Which of the following is true for Net Income Approach?

  1. Higher Equity is better
  2. Higher Debt is better
  3. Debt Ratio is irrelevant
  4. None of the above
Correct answer: (B)
Higher Debt is better

513. In MM-Model, irrelevance of capital structure is based on:

  1. Cost of Debt and Equity
  2. Arbitrage Process
  3. Decreasing k0
  4. All of the above
Correct answer: (B)
Arbitrage Process

514. The Traditional Approach to Value of the firm m that:

  1. There is no optimal capital structure
  2. Value can be increased by judicious use of leverage
  3. Cost of Capital and Capital structure are m dent
  4. 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

  1. 0% payout
  2. 100% Payout
  3. 50% Payout
  4. 25% Payout
Correct answer: (A)
0% payout

516. MM Model of Dividend irrelevance uses arbitrage between

  1. Dividend and Bonus
  2. Dividend and Capital Issue
  3. Profit and Investment
  4. 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

  1. 5
  2. 4
  3. 80
  4. 50
Correct answer: (B)
4

518. Which of the following is not a type of dividend payment?

  1. Bonus Issue
  2. Right Issue
  3. Share Split
  4. 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:

  1. Overdraft
  2. Float
  3. Factoring
  4. None of the above
Correct answer: (B)
Float

520. Which of the following is not true of cash budget ?

  1. Cash budget indicates timings of short-term borrowing
  2. Cash budget is based on accrual concept
  3. Cash budget is based on cash flow concept
  4. Repayment of principal amount of law is shown in cash budget
Correct answer: (B)
Cash budget is based on accrual concept
Page 52 of 78