1. A set of guidelines about dividend is known as _____ _____.
Correct : A. dividend policy
2. There are two approaches to dividend policy _____ _____.
Correct : A. relevance, irrelevance
3. XBRL stands for _____ _____ _____ _____.
Correct : C. extensible business reporting language
4. XBRL presents solution to _____ problem.
Correct : C. communication
5. The project with _____ co-efficient of variation should be selected.
Correct : A. lesser
6. Under standard deviation _____ of cash flow is ascertained.
Correct : A. dispersion
7. Capital rationing is selection of investment proposal under _____.
Correct : A. constraint
8. _____ provides details of compliance of corporate governance.
Correct : A. annual report
9. Investment in venture capital fund carries _____% risk.
Correct : A. 1.5
10. MPBF refers to
Correct : A. maximum permissible bank finance
11. Ploughing back of profit means
Correct : B. retainning profits
12. The first taxonomy for financial reporting was released on
Correct : B. 31st july,2000
13. Banks in India have to achieve C.A. Ratio of
Correct : A. 9%
14. Amalgamation is governed by
Correct : A. as 14
15. The % of provision required on sub-standard asset on secured portion is:
Correct : A. 15%
16. The % of provision on unsecured portion of doubtful asset is:
Correct : B. 100%
17. Cash credit and overdrafts is considered as NPA when is remains out of order for more than:
Correct : A. 90 days
18. The models known as bird in the hand argument
Correct : A. gordon\s model
19. Loans upto Rs. 1,00,000 against gold and silver ornaments carry risk
Correct : B. 10%
20. Provision for standard asset in respect of advances to commercial Real Estate sector is
Correct : D. 0%
21. The policy in which less dividend is paid is
Correct : B. conservative dividend policy
22. Present Value of a Rupee is always:
Correct : C. less than its future value
23. An ideal current ratio must be------
Correct : A. 2 : 1
24. The abbreviation "IPO" stands for-----
Correct : D. initial public offering.
25. …... shares are issued free of cost
Correct : D. bonus
26. SEBI Act was passed in the year------
Correct : C. 1992
27. Goodwill is an example of ---- asset
Correct : B. intangible.
28. Traditionally UTI was a-----
Correct : B. mutual fund.
29. Members of recognised stock exchanges are termed as
Correct : A. brokers
30. A shareholder invests in a Company's Shares mainly------
Correct : A. for capital appreciation
31. Which of the following is not applicable to IRR?
Correct : C. common for all projects
32. PQR Ltd. Is a profit-making company. It is absorbed into another group company XYZ Ltd. Which is a loss Company. This case is off
Correct : C. reverse merger
33. ABC Ltd. acquires hundred percent of preference share capital of PQR Ltd. It would result in
Correct : D. holding subsidiary relationshi p
34. TCs Ltd. acquires HCL Ltd., MPS of HCL Ltd. Is Rs.20 and EPS is Rs. 5 for an exchange ratio of 1.5: 1, what was the PE ratio used in acquiring HCL Ltd.?
Correct : C. rs. 6
35. Commercial papers is a type of
Correct : B. unsecured short term debt
36. Which of the followings is an item of Current Liability?
Correct : B. bank overdraft
37. In the Balance-sheet----- stock is indicated
Correct : B. closing
38. Rights issue is also called as -----
Correct : A. privileged subscription.
39. …… increases the number of shares without actually increasing the paid - up value of the share capital.
Correct : B. stock split- ups
40. A merchant banker-------
Correct : D. renders corporate advisory services.
41. Decision involving purchase of fixed assets are also termed as:
Correct : B. capital budgeting
42. A Balance Sheet tallies; because:
Correct : A. it is based on double entry system of accounting
43. Which of the following is a security on a moveable property?
Correct : C. hypothecati on
44. Time value of Money is based on the principle of:
Correct : B. a bird in hand; is worth two in a bush.
45. An ideal liquid ratio must be -----
Correct : A. 1 : 1
46. The abbreviation "SIP" in a mutual fund stands for-----
Correct : B. systematic investment plan
47. In case of Mutually Exclusive proposals
Correct : A. only the best project is selected
48. Payback period Technique is based on
Correct : C. earlier cash flows
49. Which of the following method of evaluation of capital budgeting proposals focuses on liquidity?
Correct : D. payback period
50. Which of the following methods focuses the maximisation of wealth of shareholders?
Correct : C. profitability index
51. Evaluation of Capital Budgeting Proposals is based on Cash flows because:
Correct : C. cash is more important than profit
52. Which of the following is not included in incremental A flows?
Correct : A. opportunity costs
53. Savings in respect of a cost is treated in capital budgeting as:
Correct : A. an inflow
54. Which of the following is not a risk factor in capital budgeting ?
Correct : B. competition risk factors
55. NPV of a proposal, as calculated by RADR real CE Approach will be:
Correct : C. zero
56. In weighted average cost of capital, rising in interest rate leads to-
Correct : A. increase in cost of debt
57. National Ltd. Has 12,000 equity shares of Rs.100 each. Sale price is equity share Rs.115 per share; flotation cost Rs.5 per share.
Expected dividend growth rate is 5% and expected dividend at the end of the financial year is Rs.11 per share, What is the cost of equity shares of National Ltd?
Correct : D. 0.15
58. Black & White Ltd. Has a cost of equity of 11% and a pre-tax cost of debt of 8.5%. The firm's target Weighted average cost of capital is 9% and its tax rate is 35%. What is the firm's target debt-equity ratio?
Correct : B. 0.5756
59. The term "capital structure" refers to:
Correct : B. long-term debt, preferred stock, and common stock equity
60. The manner in which an organization's assets are financed is referred to as its-
Correct : B. financial structure
61. In ……. Approach, the capital structure decision is relevant to the valuation of the firm.
Correct : A. Net income
62. ………… is defined as the length of time required to recover the initial cash outlay.
Correct : A. Pay back period
63. The term capital structure refers to
Correct : A. Long term debt, preferred stock and common stock equity
64. In walter model formula D stands for
Correct : A. Dividend per share
65. Financing methods for merger and acquisition exclude:
Correct : D. Overdraft
66. Convertible bonds are not :
Correct : A. Straight bonds
67. A ---------- lease is a way of providing finance
Correct : A. Finance
68. Economic value added is based on the -------?
Correct : B. Residual wealth
69. MVA stands for
Correct : B. Market value added
70. A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and
operate the remaining assets more efficiently is engaging in __________.
Correct : B. A financial acquisition
71. The ways in which mergers and acquisitions (M&As) occur do not include:
Correct : B. diversification
72. Which of the following capital budgeting methods has the value additive property?
Correct : A. NPV
73. How is economic value added (EVA) calculated?
Correct : B. It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital charge.
74. Retained earnings are
Correct : D. the cumulative earnings of the company after dividends
75. Economic value added provides a measure of
Correct : D. how much wealth a company is creating compared to its cost of capital.
76. In …… approach says that capital structure decision is relevant to the valuation of the firm.
Correct : B. Net income
77. ______ is defined as the length of time required to recover the initial cash outlay.
Correct : A. Payback period
78. The term capital structure refers to…………..
Correct : D. Composition of debt and equity
79. In Walter model alphabet ‘D’ in the formula stands for……..
Correct : A. Dividend per share
80. A critical assumption of NOI (Net operating income approach) to valuation is that…
Correct : C. Overall cost of capital is independent of the degree of leverage
81. According to …. principle the ideal pattern of capital structure is one that tends to minimize the cost
of financing.
Correct : B. Cost principle
82. ….principle says that issue of debt and preference shares do not affect the interest of equity share
holders.
Correct : C. Control principle
83. Who Introduced Net Income approach?
Correct : A. David Durand
84. One of the important assumptions of NI approach is…...
Correct : B. Cost of debt < cost of equity
85. Traditional approach of capital structure is also known as….
Correct : C. Intermediate approach
86. ……… is not a financing method for merger and acquisition.
Correct : D. Factoring
87. Convertible bonds are not ……
Correct : A. Straight bonds
88. A lease agreement grants lessee the right to….
Correct : B. Use the asset
89. Operating lease is favoured by the lessee in respect of assets which depreciate in value on account
of …..
Correct : A. Obsolescence
90. A “sale and lease back” arrangement is suitable for a lessee having…..
Correct : A. Liquidity crisis
91. Basic lease period refers to the period during which lease is irrevocable.
Correct : A. True
92. The lessee can protect himself against obsolescence by entering into a capital lease agreement with
the lessor.
Correct : B. False
93. A ---------- lease is a way of providing finance
Correct : C. Finance
94. MVA stands for….
Correct : C. Market value added
95. A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and operate the
remaining assets more efficiently is engaging in __________.
Correct : A. Strategic acquisition
96. The ways in which mergers and acquisitions occur do not include:
Correct : C. Diversification
97. Which among the following does not consider time value of money?
Correct : B. Payback period
98. How do we calculate economic value added (EVA)?
Correct : A. EVA= NOPAT – (WAAC x Capital invested)
99. Retained earnings is…….
Correct : D. The cumulative earnings of the company after dividends
100. Economic value added indicates….
Correct : B. Financial performance based on residual wealth