These are the most probable questions for Financial Management of SMU MBA in the sequence of questions for financial management. Get solved SMU MBA assignments.
1. ———- refers to the mix of or proportion of a firm’s permanent long term financing represented by debt, preference capital and quality capital.
A) Cost of capital B) Capital structure
C) Value of the firm D) Dividends
2. Particular mix of debt & equity which maximizes the value of the firm is known as———–
A) Capital B) Capital structure
C) Optimum capital structure D) maximization
3. Which of the following is not the assumption of capital structure theories?
A) Only two sources of funds
B) EBIT are expected to grow
C) Corporate tax does not exist
D) Company has infinite life
4. V = EBIT / Ko, What does “V” represent in this formula?
A) Value of firm
B) Value of equity
C) Value of cost
D) Value of competitors
5. Net Income Approach has been suggested by
A) Devid Durand B) David Durand
C) David Darand D) David F Durand
6. A company’s expected net operating income is Rs. 100000. The company has issued Rs.500000, 10% debentures of Rs 100 each.
The cost of equity is 12.5%, assuming no taxes find out overall cost of capital and the value of the firm according to NI approach.
A) 11.50% B) 11.10%
C) 11%b D) 11.25%
7. According to ———- approach, the value of the firm can be increased or cost of capital can be reduced by a judicious mix of debt and equity capital.
A) Net income B) NOI
C) Traditional D) MM
8. A company issues 1000 shares of Rs. 10 each and 10% of 5000 debentures of Rs. 10 each. It earns Rs. 30000 as operating profit. Calculate return on equity.
A) 225% B) 250%
C) 275% D) 200%
9. ——— costs are incurred when the funds are raised externally.
A) Brokerage B) Floatation
C) Sunk D) Opportunity
10. ———- is that portion of net profits which is distributed among the shareholders.
A) Interest B) Tax
C) Dividend D) Both A & B
11. R > K is the situation of which firm?
A) Constant firm B) Declining firm
C) Normal firm D) Growth firms
12. (i) The optimum payout ratio for a growth firm is zero
(ii) No optimum ratio for a normal firm
(iii) Optimum payout ratio for a declining firm is 100%
Which of the above equation is true?
A) Only (i) B) Only (i) & (ii)
C) All D) Only (ii) & (iii)
13. ——– issue bonds free of cost to the existing shareholders.
A) Property dividend B) Bonus shares
C) Cash dividend D) Bond dividend
14. A ——– is a method to increase the number of outstanding shares through a proportional reduction in the par value of shares.
A) Stock splits B) Bonus shares
C) Reverse split D) Bond dividend
15. A——— is said to be occur when two or more companies combine into one company.
A) Absorption B) Merger
C) Amalgamation D) Combination
somanath choudhury said
i wants all questions n answers of 1st sem of previous year papers.