Shri Bhausaheb Vartak Arts,Commerce and Science College, Borivali (West)

Program: - M.COM Sem: - II Course: - CORPORATE FINANCE

Sr. No Question A B C D Answer

profit planning of maximization of ensuring financial maximization of
1 maximizing profits
The basic objective of financial management is _______. the organization shareholder’s wealth discipline in the wealth shareholder’s wealth
2 Finance is vital for which of the following business purchase Product planning recruitment Sales Product planning
______ is the concept of increasing the value of a
3 purchase
business in order to increase the value of the shares held Profit Sales Wealth Wealth
______ is a situation in which actual profits of a company
4
are not sufficient to pay interest on debt and to pay Under-capitalization Over-capitalization Over-valuation Under-valuation Under-capitalization
An _______ company is one which incurs exceptionally
5
high profits as compared to industry Under-capitalization Over-capitalization Over-valuation Under-valuation Under-capitalization
Shareholder’s wealth in a firm is represented by _____ of
6 market price
firm’s common stock face value market price cost price paid up value
The hidden cost of capital which is not incurred directly is
7
termed as _____. implicit cost explicit cost fixed cost variable cost implicit cost
8 Which of the following is tax - deductible expenditure Interest on debt Preference Equity Dividend interim dividend Interest on debt
Decision involving purchase of fixed assets are also Capital structure
9
termed as ________. decisions capital budgeting capital restructuring capital mix decisions capital budgeting
10 Present value of ₹.1 discounted for ‘0’ years is ______. zero 1 0.09 0.1 1
11 _______ is an example of traditional method of capital Net present value Internal rate of Accounting rate of Profitability index Accounting rate of
Depreciation is added back to the profit generated from
12 variable
the project because depreciation is a ______ item. cash non-cash sunk non-cash
13 ______ is the rate of return that a project generates. NRR IRR NPV PI IRR
14 Capital rationing help in _____ shareholders wealth. ncreasing decreasing . minimizing maximizing maximizing
In ________ the company makes sure to take up only
15 capital mix decisions
projects with high anticipated return on investment. capital rationing capital budgeting capital structure capital rationing
_______ costs are irrelevant in determining the cash
16 Fixed
flows of a projects implicit cost explicit cost Sunk Sunk
_______ assumes to reinvest only positive cash inflows
17
at the firm’s cost of capital. MIRR IRR NPV Discounted payback MIRR
A ________ is a graphical depiction of a decision and break-even decision tree
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every potential outcome of making that decision. sensitivity analysis analysis scenario analysis decision tree analysis analysis
19 MM theory helps to understand a company’s ________ cost of capital capital rationing capital budgeting capital structure capital structure
20 EBIT is also known as _________. non-operating profits net profit operating profits gross profit operating profits
Dividend declared between two Annual General Meetings
21
is termed as ____. stock dividend cash dividend interim dividend liquidation dividend interim dividend
 _____ policy is what a company uses to decide how it
22 purchase
will payout to the shareholders in the form of dividend. capital dividend financing dividend
23 The new pension scheme is regulated by ______. SEBI IRDA PFRDA AMFI PFRDA
24 The assets of the mutual funds are held by _______. AMC Trustee Custodian Registrar Custodian
Statement of account is to be sent to investors within
25 5 7 15 5
______ days of NFO closure. 3
Within _____ days of dividend declaration, warrants will
26
have to be sent to investors. 7 10 15 30 30
The maximum initial commission that an AMC can pay to
27 0.05% 1% 2%
distributors is ____. NIL NIL
28 The difference between NAV and re-purchase price is Entry load Exit load Expenses Dividend stripping Exit load
29 Which of the following is a truly international asset class. Real estate Equity Debt Gold Gold
If a firm has no prefernece share capital, financial break
30
even level is defined as equal to ____. EBIT Interest liability Equity Dividend tax liability Interest liability
31 At indifference level of EBIT, different capital have same EBIT EPS PAT PBT EPS
which of the following is not a relevant factor in EPS rate of interest on amount of dividend paid last
32
analysis of capital structure? debt tax rate preference share dividend paid last year year
33 for a constant EBIT, if the debt level is further increased EPS will always EPS may increase EPS will never EPS will reduce EPS may increase
Between two capital plans, if expected EBIT is more than both plans be both plans are one is better than one is better than
34
indifference level of EBIT, then _____. rejected good other both plans are not good other
which of the following is true for net income approch higher equity is higher debt is debt equity ratio is
35
______. better better irrelevent lower equity is better higher debt is better
36 In case of Net Income Approach, the cost of equity is constant Increaseing decreasing reduced constant
In case of net income approach, which one of the folling
37
is constant ______. cost ofequity cost of debt WACC and Kd Ke and Kd WACC and Kd
38 NOI approach advocates theat the degree of debt relavent may be relavent irrelevant may be irrelevant irrelevant
net operating
39
Judicious use of leverage is suggested by Net income approach icnome approach traditional approach MM approach traditional approach
That personal leverage and replace corporate leverage' is net operating
40
assumed by _____. Net income approach icnome approach traditional approach MM approach MM approach
Investors can get into long term investment inter-generational
41
commitments in ________. distribution phase transition phase phase Accumulation phase Accumulation phase
42 Standard current ratio ______. 2:1 1:1 65% 1.33 2:1
43 Standard Liquid ratio _______. 2:1 1:1 65% 1.33 1:1
44 Standard proprietory ratio______. 2:1 1:1 65% 1.33 65%
45 Standard Debt service coverage ratio ______. 2:1 1:1 65% 1.33 1.33
46 Sandard Debt- equity ratio _____. 2:1 1:1 65% 1.33 2:1
management of all matters related to an organisation's cash inflows and allocation of financial financial
47
finances is called outflows resources management finance management
which of the following is not an element of financial allocation og financial decision corporate social corporate social
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management______. resources financial planning making responsibility responsibility
 the most important goal of financial management is corporate social matching income using business
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____. responsibility and expenditure assets effectively wealth maximisation wealth maximisation
which of the following is considered as the principle shareholders wealth general welfare of welfare of the shareholders wealth
50
financial objective of the firm_______. maximisation the employee society welfare of management maximisation