". VdoTips: Financial Management Practice Set



Financial Management Practice Set

111. While calculating weighted average cost of capital
(A) Preference shares are given more weight age.
(B) Cost of issue is considere
(C) Tax factor is ignore
(D) Risk factor is ignore
112. Cost of retained earnings is equal to
(A) Cost of equity to be issue
(B) Cost of internal equity.
(C) Rate of dividend expected to be declare
(D) Present rate of dividend declare
113. Under which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?
(A) Net income approach.
(B) Modigliani and Miller approach.
(C) Net operating income approach.
(D) Traditional approach.
114. Which of the following ratios is not affected by the financial structure and the tax rate of a company?
(A) Net profit margin.
(B) Earning power.
(C) Earnings per share.
(D) Capitalization rate.
115. Which of the following factors influence(s) the capital structure of a business entity?
(A) Bargaining power with the suppliers.
(B) Demand for the product of the company.
(C) Technology adopte
(D) Adequate of the assets to meet any sudden spurt in deman