Top 550+ Solved Financial Management MCQ Questions Answer
Q. Bills discounting is a -----------------------
a. Product of company
b. Accounting paper
c. Short term source of finance
d. Capital
Q. The cost of capital is the rate of return of a company must earn on investment to maintain ----------------
a. The value of the company
b. The value of the product
c. Price
d. Product quality
Q. The cost of capital is --------------
a. The maximum rate of return
b. The minimum rate of return
c. A profit
d. A product
Q. The debt capital can be raised from issue of -----
a. Bonds
b. Equity share capital
c. Right share
d. Preference share capital
Q. The cost of debt capital is the ratio of interest payable on ---------
a. Debenture
b. Equity share capital
c. Preference share capital
d. Retained earning
Q. Dividends are the ---------- of a company distributed amongst members in proportion to their shares
a. Divisible profits
b. Indivisible profits
c. Reserves
d. Assets with cash and bank
Q. A sound dividend policy contains the ------------- features
a. Stability
b. Distribution of dividend in cash
c. Gradually rising dividend ratio
d. All of these
Q. This item can be treated as an item of current liability or as an item of appropriation
a. Dividend
b. Debentures
c. Reserve
d. Debtors
Q. "Shareholder wealth" in a firm is represented by:
a. the number of people employed in the firm.
b. the book value of the firm's assets less the book value of its liabilities
c. the amount of salary paid to its employees.
d. the market price per share of the firm's common stock.
Q. The long-run objective of financial management is to:
a. maximize earnings per share.
b. maximize the value of the firm's common stock.
c. maximize return on investment.
d. maximize market share.
Q. A(n) would be an example of a principal, while a(n) would be an example of an agent.
a. shareholder; manager
b. manager; owner
c. accountant; bondholder
d. shareholder; bondholder
Q. The market price of a share of common stock is determined by:
a. the board of directors of the firm.
b. the stock exchange on which the stock is listed.
c. the president of the company.
d. individuals buying and selling the stock.
Q. The focal point of financial management in a firm is:
a. the number and types of products or services provided by the firm.
b. the minimization of the amount of taxes paid by the firm.
c. the creation of value for shareholders.
d. the dollars profits earned by the firm.
Q. ___________________ of a firm refers to the composition of its long-term funds and its capital structure.
a. Capitalisation
b. Over-capitalisation
c. Under-capitalisation
d. Market capitalization