Top 150+ Solved Working Capital Management MCQ Questions Answer
Q. Dividend irrelevance argument of MM Model is based on:
a. issue of debentures,
b. issue of bonus share,
c. arbitrage ,
d. hedging
Q. Which of the following is not true for MM Model?
a. share price goes up if dividend is paid
b. share price goes down if dividend is not paid,
c. market value is unaffected by dividend policy,
d. all of the above.
Q. Which of the following stresses on investor's preference reorient dividend thanhigher future capital gains ?
a. walter's model,
b. residuals theory,
c. gordon's model,
d. mm model.
Q. MM Model of Dividend irrelevance uses arbitrage between
a. dividend and bonus,
b. dividend and capital issue,
c. profit and investment,
d. none of the above
Q. If ke = r, then under Walter's Model, which of the following is irrelevant?
a. earnings per share,
b. dividend per share,
c. dp ratio
d. none of the above
Q. MM Model argues that dividend is irrelevant as
a. the value of the firm depends upon earning power
b. the investors buy shares for capital gain,
c. dividend is payable after deciding the retained earnings,
d. dividend is a small amount
Q. Which of the following represents passive dividend policy ?
a. that dividend is paid as a % of eps,
b. that dividend is paid as a constant amount,
c. that dividend is paid after retaining profits for reinvestment,
d. all of the above
Q. In case of Gordon's Model, the MP for zero payout is zero. It means that
a. shares are not traded,
b. shares available free of cost,
c. investors are not ready to offer any price,
d. none of the above
Q. Gordon's Model of dividend relevance is same as
a. no-growth model of equity valuation,
b. constant growth model of equity valuation,
c. price-earning ratio
d. inverse of price earnings ratio
Q. If 'r' = 'ke', than MP by Walter's Model and Gordon's Model for different payoutratios would be
a. unequal,
b. zero,
c. equal,
d. negative
Q. Dividend Payout Ratio is
a. pat÷ capital,
b. dps ÷ eps,
c. pref. dividend ÷ pat,
d. pref. dividend ÷ equity dividend
Q. Dividend Distribution Tax is payable by
a. shareholders to government
b. shareholders to company,
c. company to government,
d. holding to subsidiary company
Q. Shares of face value of 10 are 80% paid up. The company declares adividend of 50%. Amount of dividend per share is
a. . 5,
b. .4
c. . 80,
d. . 50
Q. Which of the following generally not result in increase in total dividend liability?
a. share-split,
b. right issue,
c. bonus issue
d. all of the above