The issues in international capital budgeting include
A. Both 1 and 2
B. Both 2 and 4
C. 1, 2 and 4
D. 1, 2 and 3
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Which of the following sources of finance has an implicit cost ofcapital?
A. Equity share capital
B. Preference share capital
C. Debentures
D. Retained earnings
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Negative net working capital means assets are not being used effectively, and a company may face a liquidity crisis. This implies
A. Long-term funds have been used for fixed assets
B. Short-term funds have been used for fixed assets
C. Long-term funds have been used for current assets
D. Short-term funds have been used for current assets
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When assessing economic exposure, financial managers should consider how variations in exchange rates influence . . . . . . . .
A. A company's sales prospects in foreign markets
B. The product market, the factor market and the capital market
C. The home-currency value of financial assets and liabilities denominated in foreign
D. The costs of labor and other inputs to be used in overseas production
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Dividend irrelevance argument of MM model is based on
A. Hedging
B. Issue of debentures
C. Liquidity
D. Arbitrage
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Negative net working capital implies that
A. Long-term funds have been used for fixed assets
B. Short-term funds have been used for fixed assets
C. Long-term funds have been used for current assets
D. Short-term funds have been used for current assets
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Which of the following is not true with reference to capital budgeting?
A. Capital budgeting is related to asset replacement decisions
B. Cost of capital is equal to minimum required rate of return
C. Timing of cash flows is relevant
D. Existing investment in a project is not treated as sunk cost
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The conflicts in project ranking in capital budgeting as per NPV and IRR may arise because of
A. Size disparity
B. Time disparity
C. Life disparity
D. All of these
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What are the main objectives of financing decision?
A. 1, 2, 4 and 5
B. 1, 2, 3, 4 and 5
C. 2, 3, 4 and 5
D. 2, 4 and 5
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Assertion (A): The important aspect of dividend policy is to determine the amount of earnings to be distributed to shareholders and the amount to be retained in the firm.Reason (R): Dividend policy of the firm has its effect on both the long term financing and the wealth of shareholders.
A. Both (A) and (R) are correct and (R) is the correct explanation of (A)
B. Both (A) and (R) are correct, but (R) is not the correct explanation of (A)
C. (A) is correct, but (R) is incorrect
D. (R) is correct, but (A) is incorrect
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Who proposed a model to apply economic order quantity concept of inventory mangement to determine the optimum cash holding in a firm?
A. Keith V. Smith
B. Miller and Off
C. William J. Baumol
D. J. M. keynea
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The cost of capital from all the sources of funds is called
A. Specific cost
B. Composite cost
C. Implicit cost
D. Simple Average cost
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Which of the following concepts deals with discounted cash flows?
A. Time value of debentures
B. Time value of money
C. Time value of bonds
D. Time value of treasury bills
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Which of the following are the main features of Zero Coupon Bonds?
A. 1 and 3
B. 1 and 2
C. 2 and 3
D. 1, 2 and 3
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Which combination of the following represents the assumptions of the Walter's dividend model?
A. 1, 2 and 3
B. 2, 3 and 4
C. 1, 2 and 4
D. 1, 3 and 4
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Which one of the following is not the internal factor affecting the weighted average cost of capital of a firm?
A. Investment policy of the firm
B. Capital structure of the firm
C. Dividend policy followed
D. Market risk premium for the firm
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Which of the following statements is most correct?
A. For small companies, long-term debt is the principal source of external financing
B. The current assets of the typical manufacturing firm account for over half of its total assets
C. Strict adherence to the maturity matching approach to financing would call for all current assets to be financed solely with current liabilities
D. Similar to capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months
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The concept of bimetallism, with gold and silver full-bodied coins in circulation continued up to the year
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Hedging with options is best recommended for
A. Hedging receivables
B. Hedging contingency exposures
C. Hedging payables
D. Hedging foreign currency loans
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From investor's point of view, the cost of capital is
A. Interest rate
B. Market value
C. Yield of capital sacrifice
D. Stock exchange value
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