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.Management Sciences
Category: Financial Management Mcqs
Purchase cost of assets over its useful life is classified as_________?
A. Appreciation
B. Depreciation
C. Appreciated assets
D. Appreciated liabilities
Treasury bonds are exposed to additional risks that are included________?
A. Reinvestment risk
B. Interest rate risk
C. Investment risk
D. Both A and B
In retention growth model, payout ratio is subtracted from one to calculate___________?
A. Present value ratio
B. Future value ratio
C. Retention ratio
D. Growth ratio
A company who issues bonds or stocks in result raised funds which finally____________?
A. Increases liabilities
B. Increases equity
C. Increases cash
D. Decreases cash
Tendency of measuring correlation of two variables is classified as_________?
A. Tendency coefficient
B. Variable coefficient
C. Correlation coefficient
D. Double coefficient
Net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be________?
A. 0.11%
B. 11.40%
C. 0.12 times
D. 12%
Reinvestment risk of bonds is higher on__________?
A. Short maturity bonds
B. High maturity bonds
C. High premium bonds
D. High inflated bonds
Cost of capital is equal to required return rate on equity in case if investors are only__________?
A. Valuation manager
B. Common stockholders
C. Asset seller
D. Equity dealer
Other factors held constant, greater project liquidity is because of___________?
A. Less project returns
B. Greater project return
C. Shorter payback period
D. Greater payback period
Sum of market risk and diversifiable risk are classified as total risk which is equivalent to_______________?
A. Sharpe’s alpha
B. Standard alpha’s
C. Alpha’s variance
D. Variance
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