Strategic Finance - 25

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

 

Match The Following

Question                       Correct Answer                                                              Your Answer

Opportunity cost An asset value when they are the target of an alternative use.    Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.

Exit cost             Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Exit costs of the leaving employee & recruiting & training of the replacement

Historical costs   Sacrifice necessary to hire & train people An asset value when they are the target of an alternative use.

Substitution cost Exit costs of the leaving employee & recruiting & training of the replacement Sacrifice necessary to hire & train people

 

Multiple Choice Single Answer

Question Book value is relevant to determine the firm's value because of the following reasons except:-

Correct Answer It cannot be used as a starting point to be compared & complimented by other analysis

Your Answer It is used as a starting point

 

True/False

Question For determining exchange ratio, the model developed by Conn & Nielson is used.

Correct Answer True

Your Answer True

 

Multiple Choice Single Answer

Question Normally the basis for identifying an enterprise segments are :-

Correct Answer The organizational structure of an enterprise

Your Answer Location of its customers

 

Multiple Choice Single Answer

Question FEA is a technique to analyze & evaluate :-

Correct Answer Alternative process improvements

Your Answer Alternative process improvements

 

True/False

Question Arbitrage process implies that security cannot sell at different prices.

Correct Answer True

Your Answer False

 

Select The Blank

Question ________ is not a characteristic of financial conglomerates.

Correct Answer Provide ineffective competitive process

Your Answer Provide ineffective competitive process

 

True/False

Question Retained earnings are the most important internal sources of financing the growth of the firm.

Correct Answer True

Your Answer True

 

Multiple Choice Multiple Answer

Question Significant influence is the power to :-

Correct Answer Participate in the financial decisions , Participate in the operating policy decisions

Your Answer Participate in the financial decisions , Participate in the operating policy decisions , Control over the

policies

 

Multiple Choice Single Answer

Question For paying dividends, firms will have a given amount of :-

Correct Answer Cash available

Your Answer Cash available

 

Multiple Choice Multiple Answer

Question The characteristics of working capital are :-

Correct Answer It is continually required for a going concern , Quantum of working capital fluctuates depending on

the level of activity , It is impacted by numerous transactions on a continuous basis

Your Answer The decisions related are one time decisions only , It is continually required for a going concern ,

Quantum of working capital fluctuates depending on the level of activity

 

Select The Blank

Question Earning power of the company approach tries to value the ________.

Correct Answer Current value of the assets

Your Answer Income / profit from the assets

 

Multiple Choice Multiple Answer

Question As per AS 13 Statement, the following are not considered as investments:-

Correct Answer Shares , Debentures , Other securities held as stock in trade

Your Answer Land , Debentures

 

Multiple Choice Multiple Answer

Question Operating economies of scale are achieved through the following mergers :-

Correct Answer Horizontal , Vertical , Conglomerate

Your Answer Vertical , Conglomerate , Financial

 

True/False

Question Usually only a single method is used for valuation of shares.

Correct Answer False

Your Answer False

 

Select The Blank

Question As per residual theory of dividends the focus is on ________.

Correct Answer Growth

Your Answer Growth

 

True/False

Question Management of working capital refers to the management of total assets and liabilities of a

company.

Correct Answer False

Your Answer False

 

Multiple Choice Multiple Answer

Question The important aspect of dividend policy is :-

Correct Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in

the firm

Your Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in

the firm

 

Multiple Choice Multiple Answer

Question The cost of an investment includes charges such as :-

Correct Answer Brokerage , Fees , Duties

Your Answer Brokerage , Fees , Duties

 

Select The Blank

Question Forfeiting is mostly used for ________.

Correct Answer Big ticket items & durable goods

Your Answer Big ticket items & durable goods

 

True/False

Question Planning helps an acquiring firm to identify the units it should drop & it should add.

Correct Answer True

Your Answer True

 

Multiple Choice Single Answer

Question Segment information needs to be presented :-

Correct Answer Only on the basis of the consolidated financial statements

Your Answer As separate financial statements

 

Select The Blank

Question Postage is an example of ________ cost.

Correct Answer Non traceable cost

Your Answer Input cost

 

Match The Following

Question Correct Answer Your Answer

Earning per share Acquisition is considered to be a function of the impact of the merger on the EPS Divide

net worth by the number of equity shares outstanding

Book value Divide net worth by the number of equity shares outstanding Acquisition is considered to

be a function of the impact of the merger on the EPS

Appraisal value Provides a list of the reasonableness of results obtained through

methods base upon the going concern concept Evaluate the impact of the merger on EPS & price - earning ratio

Market value Indicate the consensus of the investors Decide if the acquisition is attractive on the basis if NPV

 

Multiple Choice Multiple Answer

Question Book value of the assets is directly dependent on the accounting policies followed by the company

which is used in the following areas :-

Correct Answer Booking depreciation , Methods of provisions , Inventory valuation

Your Answer Booking depreciation , Methods of provisions , Inventory valuation

 

Multiple Choice Multiple Answer

Question Every business requires funds on a continual basis for expenses incurred on for :-

Correct Answer Purchase of raw material , Manufacturing costs , Administration

Your Answer Purchase of raw material , Manufacturing costs , Administration

 

Select The Blank

Question Forward or backward integration is a characteristic of ________.

Correct Answer Vertical Mergers

Your Answer Conglomerate mergers

 

True/False

Question According to NI Approach, decrease in leverage decreases the overall cost of capital and

increases the firm's value.

Correct Answer False

Your Answer True

 

Multiple Choice Multiple Answer

Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to

productive ones which leads to :-

Correct Answer Improved profitability , Continuity , Growth of the firm

Your Answer Improved profitability , Growth of the firm , Better facilities and work conditions

 

Multiple Choice Single Answer

Question Best practices, a tool for review process is similar to :-

Correct Answer Bench marking

Your Answer Value added analysis

 

Multiple Choice Single Answer

Question One of the important assumptions for capital structure theories is :-

Correct Answer Debt and equity are the 2 kinds of funds used by the firm

Your Answer Debt and equity are the 2 kinds of funds used by the firm

 

True/False

Question If a company has resorted to buyback its shares, it cannot make a further issue of the same kind of

securities within a period of 1 year.

Correct Answer False

Your Answer True

 

True/False

Question The scope of the data required relates to the scope of the activity model & processes under review.

Correct Answer True

Your Answer True

 

Select The Blank

Question The ________ cost tier has the advantage of being the simplest to calculate and justify.

Correct Answer Direct

Your Answer Direct

 

Select The Blank

Question Stock repurchases ________ the debt / equity ratio.

Correct Answer Increases

Your Answer Decreases

 

Select The Blank

Question The resource theory considers that the competitive position of a firm depends on its ________

Assets.

Correct Answer Specific

Your Answer General

 

Multiple Choice Single Answer

Question Many companies claim their main assets are their :-

Correct Answer People

Your Answer People

 

Multiple Choice Multiple Answer

Question The important steps involved in the analysis of mergers & acquisitions are:-

Correct Answer Planning , Searching & screening , Financial evaluation

Your Answer Planning , Searching & screening , Financial evaluation

 

Select The Blank

Question ________ is not a example of segment liability.

Correct Answer Goodwill

Your Answer Product warranty provision

 

Select The Blank

Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item.

Correct Answer Reportable segment

Your Answer Business segment

 

Multiple Choice Multiple Answer

Question The main characteristics of CAPM are :-

Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as

derivatives , Expected security return = Riskless return + beta x (expected market risk premium)

Your Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected

security return = Riskless return + beta x (expected market risk premium)

 

Multiple Choice Single Answer

Question Debt suppliers main concern is :-

Correct Answer Interest & debt repayment

Your Answer Interest & debt repayment

 

True/False

Question Organisational changes are similar to mission changes.

Correct Answer True

Your Answer False

 

Multiple Choice Single Answer

Question The difference between current assets & current liabilities is known as :-

Correct Answer Net working capital

Your Answer Working capital cycle

 

Multiple Choice Multiple Answer

Question The 3 groups of participants in a firm are :-

Correct Answer Suppliers of equity , Debt suppliers , Firm Managers

Your Answer Suppliers of equity , Debt suppliers , Firm Managers

 

Multiple Choice Single Answer

Question When the working capital is less than its peak level :-

Correct Answer The surplus is invested in liquid assets

Your Answer The surplus is invested in liquid assets

 

Multiple Choice Single Answer

Question According to a survey for reasons for share purchase, what is the percentage of cash distribution to cash holders ?

Correct Answer 0.28

Your Answer 0.28

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Posted in: Strategic Finance (Set X)

Strategic Finance - 24

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

 

Match The Following

Question Correct Answer Your Answer

AS 21 Consolidated financial statements Consolidated financial statements

AS 4 Contingencies & events occurring after the balance sheet date Contingencies & events occurring after the balance sheet date

AS 13 Accounting for investments Accounting for investments

AS 23 Accounting for investments in associates in consolidated financial statements Accounting for investments in associates in consolidated financial statements

 

Select The Blank

Question There is a ________ relationship between the number of employees & the use of

operating supplies.

Correct Answer Natural

Your Answer Natural

 

Multiple Choice Multiple Answer

Question The main characteristics of CAPM are :-

Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives ,

Expected security return = Riskless return + beta x (expected market risk premium)

Your Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives ,

Expected security return = Riskless return + beta x (expected market risk premium)

 

Multiple Choice Multiple Answer

Question A firm using a conservative policy for determining the requirements of current assets:-

Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Your Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

 

Multiple Choice Single Answer

Question As per Pecking order theory, which is the costliest means of funding :-

Correct Answer Equity Shares

Your Answer Equity Shares

 

Multiple Choice Single Answer

Question Free Reserves is a component of :-

Correct Answer Equity

Your Answer Equity

 

Select The Blank

Question ________ are those operating assets that are employed by a segment in its

operating activities.

Correct Answer Segment assets

Your Answer Segment assets

 

Multiple Choice Multiple Answer

Question The overhead expenses include :-

Correct Answer Utilities , Maintenance , Security

Your Answer Utilities , Maintenance , Security

 

Multiple Choice Multiple Answer

Question Examples of accrued expenses are :-

Correct Answer Wages , Income tax , Property tax

Your Answer Wages , Income tax , Property tax

 

Multiple Choice Single Answer

Question One of the bases for determining the residual value of similar assets is :-

Correct Answer Realizable value

Your Answer Realizable value

 

Select The Blank

Question The number of bidding centers shall not be less than ________ for buy back through

book building.

Correct Answer 30

Your Answer 30

 

Multiple Choice Single Answer

Question Conservative policy for determining the requirements of current assets is also known

as :-

Correct Answer Flexible policy

Your Answer Flexible policy

 

True/False

Question Management of working capital refers to the management of total assets and

liabilities of a company.

Correct Answer False

Your Answer False

 

Multiple Choice Single Answer

Question usually the `controlling block' tends to be between :-

Correct Answer 20 & 40 percent

Your Answer 20 & 40 percent

 

Multiple Choice Single Answer

Question The difference between current assets & current liabilities is known as :-

Correct Answer Net working capital

Your Answer Net working capital

 

Select The Blank

Question Conglomerate mergers are also called ________.

Correct Answer Concentric mergers

Your Answer Concentric mergers

 

Multiple Choice Multiple Answer

Question The main theories behind share repurchases are :-

Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or

signalling hypothesis

Your Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or

signalling hypothesis

 

Multiple Choice Single Answer

Question In value of assets method the following is also to be included as they are also of

value to the company :-

Correct Answer Non trading assets

Your Answer Non trading assets

 

Multiple Choice Multiple Answer

Question Every business requires funds on a continual basis for expenses incurred on for :-

Correct Answer Purchase of raw material , Manufacturing costs , Administration

Your Answer Purchase of raw material , Manufacturing costs , Administration

 

True/False

Question The scope of the data required relates to the scope of the activity model & processes

under review.

Correct Answer True

Your Answer True

 

Multiple Choice Single Answer

Question Investment decisions are mainly concerned with :-

Correct Answer Assets

Your Answer Assets

 

Match The Following

Question Correct Answer Your Answer

Unsecured loans Form of debt not backed by the

pledge of specific assets

Form of debt not backed by the

pledge of specific assets

Line of credit Does not constitute any legal

commitments on the part of the

bank

Does not constitute any legal

commitments on the part of the

bank

Revolving credit agreements While the commitment is in force

the bank must extend credit

whenever the borrower wishes to

borrow

While the commitment is in force

the bank must extend credit

whenever the borrower wishes to

borrow

Transaction loan The cash flow ability of the

borrower to pay the loan is

usually of paramount importance

The cash flow ability of the

borrower to pay the loan is usually

of paramount importance

 

Multiple Choice Single Answer

Question Short term sources of funds include :-

Correct Answer Current Liabilities

Your Answer Reserves

 

Multiple Choice Single Answer

Question Profitability of a company depends upon :-

Correct Answer Cost of capital

Your Answer Earning per share

 

True/False

Question DCF is not a method used to calculate market value of a firm.

Correct Answer False

Your Answer False

 

Multiple Choice Multiple Answer

Question Shortcomings of accounting numbers consist of the following :-

Correct Answer Firms use different kind of accounting methods , Business risk and financial risk do

not have any influence on accounting numbers

Your Answer Dividend policy has lot of influence on accounting numbers , Business risk and

financial risk do not have any influence on accounting numbers

 

Multiple Choice Multiple Answer

Question Debt reduces :-

Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of

decisions

Your Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of

decisions

 

True/False

Question Planning helps an acquiring firm to identify the units it should drop & it should add.

Correct Answer True

Your Answer True

 

Select The Blank

Question Non value added activities helps ________.

Correct Answer To analyse the activities more carefully

Your Answer To take a better decision

 

True/False

Question Usually only a single method is used for valuation of shares.

Correct Answer False

Your Answer False

 

Select The Blank

Question In the reproduction value method of valuation, the value of assets is taken to be on

the basis of ________

Correct Answer Replacement cost

Your Answer Replacement cost

 

Multiple Choice Multiple Answer

Question The major conditions to be fulfilled for buyback of shares as per the legal provisions

include :-

Correct Answer Articles of association should authorize buyback of shares , The shares which are

sought to be bought back should be fully paid up , After the buy back the ratio of debt

to total capital and free reserves should not be more than 2 : 1

Your Answer Articles of association should authorize buyback of shares , The shares which are

sought to be bought back should be fully paid up , After the buy back the ratio of debt

to total capital and free reserves should not be more than 2 : 1

 

Multiple Choice Single Answer

Question The Public announcement of share buy back has to be made at least :-

Correct Answer 7 Days prior to the commencement of buy back

Your Answer 7 Days prior to the commencement of buy back

 

Select The Blank

Question Combination of 2 or more companies into existing company is called ________.

Correct Answer Absorption

Your Answer Absorption

 

Select The Blank

Question ________ is not a example of segment liability.

Correct Answer Goodwill

Your Answer Accrued liabilities

 

Multiple Choice Multiple Answer

Question The characteristics of working capital are :-

Correct Answer It is continually required for a going concern , Quantum of working capital fluctuates

depending on the level of activity , It is impacted by numerous transactions on a

continuous basis

Your Answer It is continually required for a going concern , Quantum of working capital fluctuates

depending on the level of activity , It is impacted by numerous transactions on a

continuous basis

 

True/False

Question The accounting records serve as the major source of cost data.

Correct Answer True

Your Answer True

 

Select The Blank

Question AS 23 - Accounting for investments in associates in consolidated financial

statements comes into effect in respect of accounting periods commencing on or

after ________.

Correct Answer 01.04.2002

Your Answer 01.04.2002

 

True/False

Question The activity model is normally created by an activity Accountant.

Correct Answer False

Your Answer False

 

True/False

Question Organisational changes are similar to mission changes.

Correct Answer True

Your Answer True

 

Multiple Choice Single Answer

Question Equity includes :-

Correct Answer Development Rebate Reserve

Your Answer Development Rebate Reserve

 

Select The Blank

Question A geographical segment cannot be ________.

Correct Answer Countries in different zones

Your Answer Countries in different zones

 

Multiple Choice Single Answer

Question The Management of the Company may enter into a negotiated purchase, which is

referred to as :-

Correct Answer Greenfield

Your Answer Greenfield

 

Multiple Choice Single Answer

Question The acquirer should intimate to the target company & the concerned stock

exchanges as soon as its holding touches :-

Correct Answer 5 % of the voting capital of the target company

Your Answer 5 % of the voting capital of the target company

 

Multiple Choice Multiple Answer

Question Significant influence is the power to :-

Correct Answer Participate in the financial decisions , Participate in the operating policy decisions

Your Answer Participate in the financial decisions , Participate in the operating policy decisions

 

Multiple Choice Multiple Answer

Question An investment property is an investment in land or buildings :-

Correct Answer Not intended to be occupied substantially for use by investing enterprise , Not

intended to be in the operations of the investing enterprise

Your Answer Not intended to be occupied substantially for use by investing enterprise , Not

intended to be in the operations of the investing enterprise

 

Multiple Choice Single Answer

Question The following analysis is more targeted on similar activities or firms that exist in

parallel within the activity model or process flow to ensure that they are being done

the same best way :-

Correct Answer Comparative analysis

Your Answer Comparative analysis

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Posted in: Strategic Finance (Set X)

Strategic Finance - 26

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Odd lots purchase is not a method of buy back of shares.
Correct Answer False
Your Answer False
Select The Blank
Question As per NOI Approach - the overall capitalization rate remains
________ for all levels of financial leverage.
Correct Answer Constant
Your Answer Constant
Multiple Choice Single Answer
Question The following method of valuation is used for listed companies
that have an active market for their shares :-
Correct Answer Market value approach
Your Answer Market value approach
Multiple Choice Single Answer
Question The main assumption in comparative analysis is the possibility of
:-
Correct Answer Combination or co-location of similar functions
Your Answer Combination or co-location of similar functions
Multiple Choice Multiple Answer
Question The budgetary records are useful for:-
Correct Answer Validating accounting costs , Providing a rationale for division of
costs , Replacing missing data
Your Answer Validating accounting costs , Providing a rationale for division of
costs , Replacing missing data
Select The Blank
Question usually credit lines are established for a period of ________.
Correct Answer 1 year
Your Answer 1 year
Strategic Finance

Multiple Choice Single Answer
Question As per the study conducted by RBI, Current assets constitute :-
Correct Answer More than 50 % of the total assets
Your Answer More than 50 % of the total assets
Select The Blank
Question Cost of ________ is more than other sources for raising short -
term finance.
Correct Answer Bank finance
Your Answer Bank finance
Match The Following
Question Correct Answer Your Answer
Diversification Growth through the
combination of firms in
unrelated fields of
business
Different or unrelated
business activity
Horizontal mergers 2 Firms operate &
compete in a similar kind
of business
2 Firms operate & compete
in a similar kind of
business
Vertical mergers Firms in different stages of
production
Firms in different stages of
production
Conglomerate mergers Different or unrelated
business activity
Growth through the
combination of firms in
unrelated fields of business
Multiple Choice Single Answer
Question in case of temporary working capital, the investment in current
assets varies with :-
Correct Answer Seasonal requirements
Your Answer Seasonal requirements
Multiple Choice Multiple Answer
Question Organisations have various records and reports from past
actions such as :-
Correct Answer Logs to record workflow , Specific costs , External and internal
audit reports
Your Answer Logs to record workflow , Specific costs , External and internal
audit reports
True/False
Question The carrying amount for current investments is the lower of cost
& fair value.
Strategic Finance

Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question A company is prohibited to buy back its own shares in the
following circumstances :-
Correct Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
Your Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
True/False
Question Explicit cost and implicit cost are the two parts of cost of debt.
Correct Answer True
Your Answer True
Select The Blank
Question Forward or backward integration is a characteristic of ________.
Correct Answer Vertical Mergers
Your Answer Vertical Mergers
Multiple Choice Single Answer
Question As per Dorsman (1995) - financing with a high percentage of
debt prevents firms from :-
Correct Answer Investing too much
Your Answer Investing too much
Multiple Choice Single Answer
Question Estimation for determining the useful life of an asset is required
:-
Correct Answer On some reasonable basis
Your Answer On some reasonable basis
True/False
Question In market value approach, interested parties never manipulate
the stock markets.
Correct Answer False
Strategic Finance

Your Answer False
Multiple Choice Single Answer
Question Which of the following company is reaping high market valuation
due to showing human resources as an asset in its balance
sheet information?
Correct Answer Infosys
Your Answer BHEL
Multiple Choice Single Answer
Question Decrease in leverage results in increasing the :-
Correct Answer Overall cost of capital
Your Answer Overall cost of capital
Multiple Choice Single Answer
Question Suppliers of equity are interested in :-
Correct Answer High share prices
Your Answer High share prices
Match The Following
Question Correct Answer Your Answer
Free cash flow theory Enormous conflicts of
interest between
Stakeholders and
shareholders
Enormous conflicts of
interest between
Stakeholders and
shareholders
Net income approach Cost of debt & equity do
not change with a change
in leverage ratio
Cost of debt & equity do
not change with a change
in leverage ratio
Net operating income
approach
The overall capitalization
rate remains constant for
all levels of financial
leverages
The overall capitalization
rate remains constant for
all levels of financial
leverages
Modigliani - Miller Theory weighted average cost of
capital does not change
with a change in the
proportion of debt to
equity in the capital
structure
weighted average cost of
capital does not change
with a change in the
proportion of debt to equity
in the capital structure
Select The Blank
Strategic Finance

Question The date on which the announcement is made of new dividend is
called ________.
Correct Answer Declaration date
Your Answer Ex - dividend date
Multiple Choice Multiple Answer
Question The net income approach is based on following 3 assumptions :-
Correct Answer There are no taxes , Cost of debt is less than equity
capitalization rate , Use of debt doesn't change the risk
perception of investors
Your Answer There are no taxes , Cost of debt is less than equity
capitalization rate , Use of debt doesn't change the risk
perception of investors
Multiple Choice Single Answer
Question A single business segment does not include products & services
:-
Correct Answer With significantly differing risks & returns
Your Answer With significantly differing risks & returns
True/False
Question For determining exchange ratio, the model developed by Conn &
Nielson is used.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Debt suppliers main concern is :-
Correct Answer Interest & debt repayment
Your Answer Interest & debt repayment
Multiple Choice Single Answer
Question Value added analysis is a method to determine, if elements
within a process flow provide the :-
Correct Answer Values
Your Answer Values
Select The Blank
Question Investors can reduce the company related risk by diversification
of their investments in ________.
Strategic Finance

Correct Answer Shares of a large number of companies
Your Answer Shares of a large number of companies
Multiple Choice Multiple Answer
Question The 3 main types of accounting records followed by an
organisation are :-
Correct Answer Organisational accounting , Budgetary accounting , Cost
accounting
Your Answer Organisational accounting , Budgetary accounting , Cost
accounting
Multiple Choice Multiple Answer
Question The following disclosures in financial statements in relation to
investments are appropriate :-
Correct Answer The accounting policies for the determination of carrying amount
of investments , Profits & losses on disposal of current
investments , The amounts included in P & L Statement
Your Answer The accounting policies for the determination of carrying amount
of investments , Profits & losses on disposal of current
investments , The amounts included in P & L Statement
Select The Blank
Question In the shareholding pattern of a company, the promoter's holding
includes________.
Correct Answer Foreign Promoters
Your Answer Foreign Promoters
Multiple Choice Multiple Answer
Question For M & As, the acquiring firm needs industry data on :-
Correct Answer Market growth , Nature of competition , Degree of regulation
Your Answer Market growth , Marketing capabilities , Nature of competition
Multiple Choice Multiple Answer
Question The financial framework of a merger decision covers 3
interrelated aspects i.e. :-
Correct Answer Determining the firm's value , Financing techniques in mergers ,
Analysis of merger as a capital budgeting decision
Your Answer Determining the firm's value , Financing techniques in mergers ,
Analysis of merger as a capital budgeting decision
Multiple Choice Single Answer
Question According to Net Income Approach, the average cost of capital
declines as the leverage ratio :-
Correct Answer Increases
Strategic Finance

Your Answer Increases
True/False
Question A long term investment is an investment other than a current
investment.
Correct Answer True
Your Answer True
True/False
Question The capital Asset pricing model describes the pricing of assets
as well as derivatives.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Personnel services expenses is made up of:-
Correct Answer Personnel salaries , Cost of facilities , Training & development
budgets
Your Answer Cost of facilities , Training & development budgets
Multiple Choice Multiple Answer
Question Investments having no physical existence includes :-
Correct Answer Shares , Debentures , Bonds
Your Answer Shares , Debentures , Bonds
Select The Blank
Question the commercial paper may be issued in the multiples of
________.
Correct Answer 5 lakhs
Your Answer 5 lakhs
Multiple Choice Single Answer
Question Modigliani - Miller Theoram is based on :-
Correct Answer Perfect Capital Markets
Your Answer Perfect Capital Markets
Select The Blank
Strategic Finance

Question The most popular kind of dividend policy is one that pays a
________.
Correct Answer Regular, steady dividend
Your Answer Regular, steady dividend
Multiple Choice Multiple Answer
Question AS 13 Does not deal with :-
Correct Answer The bases for recognition of interest, dividends & rentals earned
on investments , Operating or finance leases , Investment in
mutual funds
Your Answer The bases for recognition of interest, dividends & rentals earned
on investments , Operating or finance leases , Investment in
mutual funds
True/False
Question According to NOI Approach, any capital structure is optimum.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question One of the important assumptions for capital structure theories is
:-
Correct Answer Debt and equity are the 2 kinds of funds used by the firm
Your Answer The payout ratio is never 100 %
Multiple Choice Single Answer
Question Arbitrage means :-
Correct Answer Securities cannot sell at different prices
Your Answer Securities cannot sell at different prices
True/False
Question Short term financing is meant for funding working capital of a
company.
Correct Answer True
Your Answer True

Read more »

Posted in: Strategic Finance (Set X)