The sales of a firm are Rs. 74 Iakh, the variable costs are Rs. 40 lakh, the fixed costs are Rs. 8 Iakh. The operating leverage of the firm will be
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Which of the following is not a source of short-term finance?
A. Factoring
B. Commercial papers
C. Trade credit
D. Retained earnings
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When a company is liquidated, the debenture holders have a prior right for
A. Principal amount
B. Interest
C. Both A and B
D. None of these
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Which of the following is not a type of swap agreement?
A. Currency
B. Credit
C. Money market
D. Interest rate
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The optimum capital structure of a company is planned as per considerations of
I. Profitability
II. Solvency
III. Marketability of shares
IV. Control
A. I, II, and IV only
B. I and II only
C. II, III and IV only
D. III and IV only
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Match the following with the most suitable option.
List-I
List-II
a. Modigliani-Miller Approach
1. Commercial paper
b. Net Operating Income Approach
2. Working capital
c. Short-term money market instruments
3. Capital structure
d. Factoring
4. Arbitrage
A. a-4, b-3, c-1, d-2
B. a-3, b-4, c-1, d-2
C. a-3, b-2, c-1, d-4
D. a-4. b-2, c-3, d-1
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The cost of new debt or marginal debt is called
A. Historical rate
B. Embedded rate
C. Marginal rate
D. Both A and B
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When a company has surplus reserves but does not have adequate liquidity, then the company capitalises its reserves as
A. bonus share
B. equity shares
C. preference shares
D. debt
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Under the Walter Model, if the rate of return is greater than the cost of capital, then what should be the impact of it?
A. These firms are called growth firms, they should have a hundred per cent payout ratio
B. These firms are called growth firms, they should have a zero payout ratio
C. The firm is indifferent towards how much is to be retained and how much is to be distributed among the shareholders
D. There is no method to show relationship between returns and cost under Walter's Model
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Which of the following statements is false?
A. The opportunity cost of input is considered in capital budgeting
B. Capital budgeting decisions are reversible in nature
C. Cash flows and accounting profits are different
D. An expansion decision is a capital budgeting decision
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If the earnings of company are stable then it can easily follow
A. stable dividend policy
B. flexible dividend policy
C. lower rate dividend policy
D. None of these
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Which of the following refers to the institutional arrangements countries adopt to govern exchange rates?
A. International monetary fund
B. International monetary system
C. Global agreement on exchange rates
D. Bretton woods arrangement
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Securitisation market in India includes.
A. Mutual Funds
B. Pension Fund
C. Public Sector Units
D. All of these
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Interest rate risk is a type of
A. credit risk
B. market risk
C. operational risk
D. All of the above
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In 2015, the RBI issued regulations known as the Rupee Bond Guidelines allowing Indian issuers to raise funding through the issuance of rupee-denominated debt instruments. These instruments are now widely referred to as
A. Junk Bonds
B. Indian Depository Receipts
C. Masala Bonds
D. Bharat Bonds
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Which of the following indicates the concept of net working capital?
A. Total assets
B. Fixed assets
C. Current assets
D. Current assets minus current liabilities
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Cost of capital does not mean
A. cut off rate decided by management
B. rate of interest
C. expectations of investors for dividend
D. money paid to SEBI for permission to acquire capital
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"Hardcore working capital" is also called
A. variable working capital
B. permanent working capital
C. gross working capital
D. net working capital
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The following method cannot be used for managing translation exposure.
A. Forward contract
B. Option contract
C. Exposure netting
D. Leading and lagging
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Finance made available by specialised financial institutions is called
A. institutional finance
B. business finance
C. public finance
D. All of these
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