Top 550+ Solved Financial Management MCQ Questions Answer
Q. Profit maximization may lead to better and efficient utilization of the recourses only when there is -----------
a. Monopoly
b. Oligopoly
c. Perfect competition
d. None of these
Q. During inflationary period the risk free interest rate will be …………………………….
a. Lower
b. Does not change
c. Higher
d. Cannot say
Q. Implicit cost also called ………………………….
a. Marginal cost
b. Composite cost
c. Opportunity cost
d. Average cost
Q. Cost of irredeemable preferences share capital is equal to kp=preference dividend divided by
a. Total liabilities
b. Face value Preference issue
c. Total capital
d. Net proceeds
Q. In India ,preference shares must be redeemed within a period
a. 3 year of issue
b. 6 years of issue
c. 10 years of issue
d. 20 years of issue
Q. Dividend yield method the cost of equality is ascertained as a percentage of
a. Expected dividend
b. IRR
c. WACC
d. Expected profits
Q. In the case of existing shares cost of equity is computed under dividend yield method by dividing dividend per share with
a. Face value
b. Market value
c. Net proceeds
d. None of these
Q. The weighted average cost of new or additional capital is called
a. Opportunity cost
b. Composite cost
c. Marginal cost
d. Average cost
Q. The ratio between debt and equity in the total capitalization is called
a. Capital gearing
b. Capitalization
c. Capital structure
d. Financial structure
Q. Capital composition of a company including long term, medium term and short term finances
a. Capital gearing
b. Capitalization
c. Capital structure
d. Financial structure
Q. According NO1 theory, increase in EBIT will
a. Increase the value of the firm
b. Decrees the value of firm
c. Not affect value
d. Increase when debt is increased
Q. According NO1 theory ,value of firm is
a. Related to its capital structure
b. Not related to its capital structure
c. Related to debt
d. Related to overall cost of capital
Q. --------------- theory says that the value of a firm will be different stages of growth
a. Net income
b. NOI
c. M M theory
d. Traditional theory
Q. Redundant working capital means
a. Optimum working capital
b. Shortage of working capital
c. Idle working capital
d. None of these