Top 550+ Solved Financial Management MCQ Questions Answer
Q. At Indifference level of EBIT, different capital have
a. Same EBIT
b. Same EPS
c. Same PAT
d. Same PBT
Q. Which of the following is not a relevant factor m EPS Analysis of capital structure?
a. Rate of Interest on Debt
b. Tax Rate
c. Amount of Preference Share Capital
d. Dividend paid last year
Q. For a constant EBIT, if the debt level is further increased then
a. EPS will always increase
b. EPS may increase
c. EPS will never increase
d. None of the above
Q. Between two capital plans, if expected EBIT is more than indifference level of EBIT,then
a. Both plans be rejected
b. Both plans are good
c. One is better than other
d. None of the above
Q. Financial break-even level of EBIT is:
a. Intercept at Y-axis,
b. Intercept at X-axis
c. Slope of EBIT-EPS line
d. None of the above.
Q. In case of Net Income Approach, the Cost of equity is:
a. Constant
b. Increasing
c. Decreasing
d. None of the above
Q. In case of Net Income Approach, when the debt proportion is increased, the cost of debt:
a. Increases
b. Decreases
c. Constant
d. None of the above
Q. Which of the following is true of Net Income Approach?
a. VF = VE+VD
b. VE = VF+VD
c. VD = VF+VE
d. VF = VE-VE
Q. Net Operating Income Approach, which one of the lowing is constant?
a. Cost of Equity
b. Cost of Debt
c. WACC & kd
d. Ke and Kd
Q. NOI Approach advocates that the degree of debt financing is:
a. Relevant
b. May be relevant
c. Irrelevant
d. May be irrelevant
Q. 'Judicious use of leverage' is suggested by:
a. Net Income Approach
b. Net Operating Income Approach
c. Traditional Approach
d. All of the above
Q. Which one is true for Net Operating Income Approach?
a. VD = VF - VE
b. VE = VF + VD
c. VE = VF - VD
d. VD = VF + VE
Q. In the Traditional Approach, which one of the following remains constant?
a. Cost of Equity
b. Cost of Debt
c. WACC
d. None of the above
Q. In MM-Model, irrelevance of capital structure is based on:
a. Cost of Debt and Equity
b. Arbitrage Process
c. Decreasing k0
d. All of the above
Q. 'That there is no corporate tax' is assumed by:
a. Net Income Approach
b. Net Operating Income Approach,
c. Traditional Approach
d. All of these