". VdoTips: Financial Management Practice Set



Financial Management Practice Set

96. Which of the following characteristics are true, with reference to preference capital?
(A) Preference dividend is tax deductible.
(B) The claim of preference shareholders is prior to the claim of equity shareholders.
(C) Preference share holders are not the owners of the concern.
(D) All of the above
97. What are the factors which make debentures attractive to investors?
(A) They enjoy a high order of priority in the event of liquidation.
(B) Stable rate of return.
(C) No risk.
(D) All of the above.
98. The method of raising equity capital from existing members by offering securities on pro rata basis is referred to as
(A) Public issue.
(B) Bonus issue.
(C) Private placement.
(D) Bought-Out-Deal.
99. Which of the following is not a source of long-term finance?
(A) Equity shares.
(B) Preference shares.
(C) Commercial papers.
(D) Reserves and surplus.
100. EBIT means
(A) Operating Income
(B) Operating Profit
(C) Earnings before interest and tax
(D) All of the above