Financial Management
551. Residuals Theory argues that dividend is a
- Relevant Decision
- Active Decision
- Passive Decision
- Irrelevant Decision
Correct answer: (C)
Passive Decision
552. MM Model argues that dividend is irrelevant as
- the value of the firm depends upon earning power
- the investors buy shares for capital gain
- dividend is payable after deciding the retained earnings
- dividend is a small amount
Correct answer: (A)
the value of the firm depends upon earning power
553. Dividend Payout Ratio is
- PAT÷ Capital
- DPS ÷ EPS
- Pref. Dividend ÷ PAT
- Pref. Dividend ÷ Equity Dividend
Correct answer: (B)
DPS ÷ EPS
554. Every company should follow
- High Dividend Payment
- Low Dividend Payment
- Stable Dividend Payment
- Fixed Dividend Payment
Correct answer: (C)
Stable Dividend Payment
555. Cash Budget does not include
- Dividend Payable
- Postal Expenditure
- Issue of Capital
- Total Sales Figure
Correct answer: (D)
Total Sales Figure
556. Miller-Orr Model deals with
- Optimum Cash Balance
- Optimum Finished goods
- Optimum Receivables
- All of the above
Correct answer: (A)
Optimum Cash Balance
557. Marketable securities are primarily
- Equity shares,'
- Preference shares
- Fixed deposits with companies
- Short-term debt investments
Correct answer: (D)
Short-term debt investments
558. Bad debt cost is not borne by factor in case of
- Pure Factoring
- Without Recourse Factoring
- With Recourse Factoring
- None of the above
Correct answer: (C)
With Recourse Factoring
559. Payment to creditors is a manifestation of cash held for:
- Transactionery Motive
- Precautionary Motive
- Speculative Motive
- All of the above
Correct answer: (A)
Transactionery Motive
560. If a company sells its receivable to another party to raise funds, it is known as
- Securitization
- Factoring
- Pledging
- None of the above
Correct answer: (B)
Factoring