General Financial Management MCQs

1. Financial Management is mainly concerned with

2. In his traditional role the finance manager is responsible for

3. Financial accounting is designed

4. The primary goal of the financial management is

5. Capital budgeting is related to

6. . Working capital management is managing

7. The decision to issue various securities in different proportions is called

8. ____ is quantitative aspect of the financial planning of an enterprise, if denotes total amount of securities issued by a company.

9. _____ means the entire liabilities side of the balance sheet (long term and short term) (debt and equity)

10. v

11. The decision to issue various securities in different proportions is called

12. The company’s cost of capital is called

13. Market value of the cost of capital is decided by

14. Cost of retained earnings is equal to

15. The expansion of CAPM is

16. The company’s’ average cost of capital is

17. The cost of capital of a long-term debt is generally

18. Interest on debt-capital provides a _______ to the equity holders

19. The overall cost of capital is used as the minimum acceptable return on

20. The required rate of return for an investment project should

21. _____ approach prove that the cost of capital is not affected by changes in the capital structure

22. In_____ approach the debt-equity mix is irrelevant in determination of cost of capital and the value of a firm.

23. _____ approach is based upon certain unrealistic assumptions such a perfect market, or the expected earnings of all the firms have identical risk etc.,

24. n _____ approach a firm can minimize the weighted average cost of capital and increase the value of a firm and market price of equity share by using debt to the maximum

25. Net operating income theory is suggested by

26. In _____ approach, the change in the capital structure of company does not affect the market value of the firm

27. In _____ approach the value of the firm and overall cost of capital remains constant irrespective of method of financing. (Debt-equity)

28. In which approach there is nothing as an optimal capital structure and every capital structure is the optimum capital structure

29. _____ approach is a compromise between the two extremes of net income approach and net operating income approach.

30. In _____ theory, the value of the firm can be increased initially or the cost of capital can be decreased by using more debt is a cheaper source of funds than equity

31. ____ refers to that part of profits of a company which is distributed by the company among its shareholders

32. In which theory dividend decision does not affect the share holders wealth and valuation of the firm

33. In which theory dividend decision materially affects the shareholders wealth and also the valuation of the firm

34. The residual approach and MM approach come under

35. The Walter’s approach and Gordon’s approach come under

36. Myron Gordon, Jone Linter, James Walter and Richardson supports

37. Walter model is based on the relationship between the firms return on investment (r) and ____

38. If the firms earns a higher rate of return on its investments than the required rate of return (r>k) it is called

39. If the firm is r>k means the earnings must be

40. Pay-out ratio denotes that

41. . Difference between inflow and outflow of funds is known as ___________

42. ________ refers to the amount of funds invested in various components of current assets. It consists of raw materials, work in progress, debtors, finished goods, etc.

43. . The difference between current assets and current liabilities of the business concern is termed as ____________

44. The surplus of current assets over current liabilities is known as ______

45. The minimum amount of working capital which even required during the dullest season of year is known as ___________

46. The amount owned to a company resulting from the company providing goods and services on credit is known as __________

47. __________ motive refers to the need to hold cash to satisfy normal disbursement collection activities associated with firm’s ongoing operation.

48. Accounts receivables are also known as __________

49. Decision relating to working capital and short term financing are referred to as ____________

50. Identify the cash balance which allows for the business to meet day to day expenses, but reduces cash holding costs is known as _______

51. In a business formula such as return on investment, ""on"" means ________.

52. One major expense associated with issuing new shares of common stock is ________.

53. The primary goal of a financial manager is ________.

54. _____ are also called debentures and are not backed by specific collateral.

55. A _____ budget allocates resources on the basis of a single estimate of costs.

56. Due to ____, market forces should realign the spot rate of a currency among banks.

57. _____________ are examples of investment bankers offering traditional commercial banking services.