Q.1
A project whose cash flows are more than capital invested for rate of return then net present value will be
Q.2
In mutually exclusive projects, project which is selected for comparison with others must have
Q.3
Relationship between Economic Value Added (EVA) and Net Present Value (NPV) is considered as
Q.4
If retention rate is 0.68 then payout rate will be
Q.5
Cost of common stock is 15% and bond yield is 10.5% then bond risk premium will be
Q.6
Cost of equity which is raised by reinvesting earnings internally must be higher than the
Q.7
Dividend per share is Rs 15 and sell it for Rs 120 and floatation cost is Rs 3.0 then component cost of preferred stock will be
Q.8
In independent projects evaluation, results of internal rate of return and net present value lead to
Q.9
An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax
Q.10
Beta which is estimated as regression slope coefficient is classified as
Q.11
Capital budgeting decisions are analyzed with help of weighted average and for this purpose
Q.12
An uncovered cost at start of year is Rs 200, full cash flow during recovery year is Rs 400 and prior years to full recovery is 3 then payback would be
Q.13
In capital budgeting, positive net present value results in
Q.14
In pure play method, a company can calculate its own cost of capital with help of averaging an
Q.15
Type of cost which is used to raise common equity by reinvesting internal earnings is classified as
Q.16
If future return on common stock is 19% and rate on T-bonds is 11% then current market risk premium will be
Q.17
In weighted average cost of capital, capital components are funds that usually offer by
Q.18
Cost which is used to calculate weighted average cost of capital is classified as
Q.19
Special situation in which large projects are financed by with and securities claims on project's cash flow is classified as
Q.20
Forecast by analysts, retention growth model and historical growth rates are methods used for an
Q.21
Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called
Q.22
A formula of after-tax component cost of debt is
Q.23
Historical growth rates, analysis forecasts and retention growth model are approaches to estimate
Q.24
A risk associated with project and way considered by well diversified stockholder is classified as
Q.25
Cost of common stock is 13% and bond risk premium is 5% then bond yield would be
Q.26
Method in which company finds other companies considered in same line of business to evaluate divisions is classified as
Q.27
Bond risk premium is added in to bond yield to calculate the
Q.28
Cost of capital is equal to required return rate on equity in case if investors are only
Q.29
Interest rate is 12% and tax savings (1-0.40) then after-tax component cost of debt will be
Q.30
Retention ratio is 0.60 and return on equity is 15.5% then growth retention model would be
Q.31
In uneven cash flow, 'IRR' is an abbreviation of an
Q.32
A company who issues bonds or stocks in result raised funds which finally
Q.33
During planning period, a marginal cost for raising a new debt is classified as
Q.34
Risk free rate is subtracted from expected market return is considered as
Q.35
Type of variability in which a project contributes in return of company is considered as
Q.36
Rate of required return by debt holders is used for estimation the
Q.37
In weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of
Q.38
In retention growth model, payout ratio is subtracted from one to calculate
Q.39
Variability for expected returns for projects is classified as
Q.40
Cost of common stock is 16% and bond yield is 9% then bond risk premium would be
Q.41
Future value of annuity FVA(due) is, if deposited value is Rs 100 and earn 5% every year of total three years will be
Q.42
Total common equity Rs 996,000,000 and shares outstanding 50,000,000 then book value per share would be
Q.43
Total amount of depreciation charged on long term assets is classified as
Q.44
Finance company providing loans at 3% with five compounding periods per year, nominal annual rate is classified as
Q.45
Values of assets purchased or liabilities recorded as recorded by bookkeepers are considered as
Q.46
A stock which is hybrid and works as a cross between debt and common stock is considered as
Q.47
If deposited money Rs 10,000 in bank pays interest 10% annually, an amount after five years will be
Q.48
Student loans, mortgages and car loans are examples of
Q.49
An annuity with an extended life is classified as
Q.50
Stock selling price is Rs 45, an expected dividend is Rs 10 and an expected growth rate is 8% then cost of common stock would be
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