McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration in Finance (BBA Finance) .
| 51. |
If ke = r, then under Walter's Model, which of the following is irrelevant? |
| A. | earnings per share, |
| B. | dividend per share, |
| C. | dp ratio |
| D. | none of the above |
| Answer» C. dp ratio | |
| 52. |
MM Model argues that dividend is irrelevant as |
| A. | the value of the firm depends upon earning power |
| B. | the investors buy shares for capital gain, |
| C. | dividend is payable after deciding the retained earnings, |
| D. | dividend is a small amount |
| Answer» A. the value of the firm depends upon earning power | |
| 53. |
Which of the following represents passive dividend policy ? |
| A. | that dividend is paid as a % of eps, |
| B. | that dividend is paid as a constant amount, |
| C. | that dividend is paid after retaining profits for reinvestment, |
| D. | all of the above |
| Answer» C. that dividend is paid after retaining profits for reinvestment, | |
| 54. |
In case of Gordon's Model, the MP for zero payout is zero. It means that |
| A. | shares are not traded, |
| B. | shares available free of cost, |
| C. | investors are not ready to offer any price, |
| D. | none of the above |
| Answer» C. investors are not ready to offer any price, | |
| 55. |
Gordon's Model of dividend relevance is same as |
| A. | no-growth model of equity valuation, |
| B. | constant growth model of equity valuation, |
| C. | price-earning ratio |
| D. | inverse of price earnings ratio |
| Answer» B. constant growth model of equity valuation, | |
| 56. |
If 'r' = 'ke', than MP by Walter's Model and Gordon's Model for different payout ratios would be |
| A. | unequal, |
| B. | zero, |
| C. | equal, |
| D. | negative |
| Answer» C. equal, | |
| 57. |
Dividend Payout Ratio is |
| A. | pat÷ capital, |
| B. | dps ÷ eps, |
| C. | pref. dividend ÷ pat, |
| D. | pref. dividend ÷ equity dividend |
| Answer» B. dps ÷ eps, | |
| 58. |
Dividend declared by a company must be paid in |
| A. | 20 days, |
| B. | 30 days |
| C. | 32 days, |
| D. | 42 days |
| Answer» B. 30 days | |
| 59. |
Dividend Distribution Tax is payable by |
| A. | shareholders to government |
| B. | shareholders to company, |
| C. | company to government, |
| D. | holding to subsidiary company |
| Answer» C. company to government, | |
| 60. |
Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is |
| A. | . 5, |
| B. | .4 |
| C. | . 80, |
| D. | . 50 |
| Answer» B. .4 | |
| 61. |
Which of the following generally not result in increase in total dividend liability? |
| A. | share-split, |
| B. | right issue, |
| C. | bonus issue |
| D. | all of the above |
| Answer» A. share-split, | |
| 62. |
Dividends are paid out of |
| A. | accumulated profits |
| B. | gross profit, |
| C. | profit after tax, |
| D. | general reserve |
| Answer» C. profit after tax, | |
| 63. |
In India, Dividend Distribution tax is paid on |
| A. | equity share |
| B. | preference share |
| C. | debenture, |
| D. | both (a) and (b) |
| Answer» D. both (a) and (b) | |
| 64. |
Every company should follow |
| A. | high dividend payment |
| B. | low dividend payment, |
| C. | stable dividend payment |
| D. | fixed dividend payment |
| Answer» C. stable dividend payment | |
| 65. |
'Constant Dividend Per Share' Policy is considered as: |
| A. | increasing dividend policy |
| B. | decreasing dividend policy, |
| C. | stable dividend policy |
| D. | none of the above |
| Answer» C. stable dividend policy | |
| 66. |
Which of the following is not a type of dividend payment? |
| A. | bonus issue, |
| B. | right issue, |
| C. | share split, |
| D. | both (b) and (c) |
| Answer» C. share split, | |
| 67. |
If the following is an element of dividend policy? |
| A. | production capacity, |
| B. | change in management, |
| C. | informational content, |
| D. | debt service capacity |
| Answer» C. informational content, | |
| 68. |
Stock split is a form of |
| A. | dividend payment, |
| B. | bonus issue, |
| C. | financial restructuring, |
| D. | dividend in kind |
| Answer» C. financial restructuring, | |
| 69. |
In stock dividend: |
| A. | authorized capital always increases, |
| B. | paid up capital always increases, |
| C. | face value per share decreases |
| D. | market price for share decreases |
| Answer» D. market price for share decreases | |
| 70. |
Which of the following is not considered in Lintner's Model ? |
| A. | dividend payout ratio, |
| B. | current eps, |
| C. | speed of adjustment, |
| D. | preceding year eps |
| Answer» D. preceding year eps | |
| 71. |
Which of the following is not relevant for dividend payment for a year ? |
| A. | cash flow position |
| B. | profit position, |
| C. | paid up capital, |
| D. | retained earnings |
| Answer» D. retained earnings | |
| 72. |
Cash Budget does not include |
| A. | dividend payable |
| B. | postal expenditure, |
| C. | issue of capital, |
| D. | total sales figure |
| Answer» D. total sales figure | |
| 73. |
Which of the following is not a motive to hold cash? |
| A. | transactionary motive, |
| B. | pre-scautionary motive, |
| C. | captal investment, |
| D. | none of the above. |
| Answer» C. captal investment, | |
| 74. |
Cheques deposited in bank may not be available for immediate use due to |
| A. | payment float |
| B. | recceipt float |
| C. | net float, |
| D. | playing the float. |
| Answer» B. recceipt float | |
| 75. |
Difference between between the bank balance as per Cash Book and Pass Book may be due to: |
| A. | overdraft, |
| B. | float, |
| C. | factoring, |
| D. | none of the above. |
| Answer» B. float, | |
| 76. |
Concentration Banking helps in |
| A. | reducing idle bank balance |
| B. | increasing collection, |
| C. | increasing creditors, |
| D. | reducing bank transactions. |
| Answer» B. increasing collection, | |
| 77. |
The Transaction Motive for holding cash is for |
| A. | safety cushion |
| B. | daily operations, |
| C. | purchase of assets |
| D. | payment of dividends. |
| Answer» B. daily operations, | |
| 78. |
Miller-Orr Model deals with |
| A. | optimum cash balance, |
| B. | optimum finished goods, |
| C. | optimum receivables, |
| D. | all of the above. |
| Answer» A. optimum cash balance, | |
| 79. |
Float management is related to |
| A. | cash management, |
| B. | inventory management, |
| C. | receivables management, |
| D. | raw materials management. |
| Answer» A. cash management, | |
| 80. |
Which of the following is not an objective of cash management ? |
| A. | maximization of cash balance |
| B. | minimization of cash balance |
| C. | optimization of cash balance, |
| D. | zero cash balance. |
| Answer» C. optimization of cash balance, | |
| 81. |
Which of the following is not true of cash budget ? |
| A. | cash budget indicates timings of short-term borrowing, |
| B. | cash budget is based on accrual concept |
| C. | cash budget is based on cash flow concept |
| D. | repayment of principal amount of law is shown in cash budget. |
| Answer» B. cash budget is based on accrual concept | |
| 82. |
Baumol's Model of Cash Management attempts to: |
| A. | minimise the holding cost, |
| B. | minimization of transaction cost, |
| C. | minimization of total cost, |
| D. | minimization of cash balance |
| Answer» C. minimization of total cost, | |
| 83. |
Which of the following is not considered by Miller-Orr Model? |
| A. | variability in cash requirement |
| B. | cost of transaction, |
| C. | holding cost, |
| D. | total annual requirement of cash. |
| Answer» D. total annual requirement of cash. | |
| 84. |
Marketable securities are primarily |
| A. | equity shares,' |
| B. | preference shares, |
| C. | fixed deposits with companies |
| D. | short-term debt investments. |
| Answer» D. short-term debt investments. | |
| 85. |
5Cs of the credit does not include |
| A. | collateral |
| B. | character, |
| C. | conditions, |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 86. |
Which of the following is not an element of credit policy? |
| A. | credit terms |
| B. | collection policy |
| C. | cash discount terms, |
| D. | sales price. |
| Answer» D. sales price. | |
| 87. |
Ageing schedule incorporates the relationship between |
| A. | creditors and days outstanding, |
| B. | debtors and days outstanding, |
| C. | average age of directors, |
| D. | average age of all employees. |
| Answer» B. debtors and days outstanding, | |
| 88. |
Bad debt cost is not borne by factor in case of |
| A. | pure factoring, |
| B. | without recourse factoring, |
| C. | with recourse factoring, |
| D. | none of the above. |
| Answer» C. with recourse factoring, | |
| 89. |
Which of the following is not a technique of receivables Management? |
| A. | funds flow analysis |
| B. | ageing schedule, |
| C. | days sales outstanding |
| D. | collection matrix. |
| Answer» A. funds flow analysis | |
| 90. |
Which of the following is not a part of credit policy? |
| A. | collection effort, |
| B. | cash discount, |
| C. | credit standard, |
| D. | paying practices of debtors. |
| Answer» D. paying practices of debtors. | |
| 91. |
Which is not a service of a factor? |
| A. | administrating sales ledger, |
| B. | advancing against credit sales, |
| C. | assuming bad debt losses, |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 92. |
Credit Policy of a firm should involve a trade-off between increased |
| A. | sales and increased profit |
| B. | profit and increased costs of receivables, |
| C. | sales and cost of goods sold, |
| D. | none of the above. |
| Answer» B. profit and increased costs of receivables, | |
| 93. |
Out of the following, what is not true in respect of factoring? |
| A. | continuous arrangement between factor and seller, |
| B. | sale of receivables to the factor, |
| C. | factor provides cost free finance to seller |
| D. | none of the above. |
| Answer» C. factor provides cost free finance to seller | |
| 94. |
Payment to creditors is a manifestation of cash held for: |
| A. | transactionery motive, |
| B. | precautionary motive, |
| C. | speculative motive, |
| D. | all of the above. |
| Answer» A. transactionery motive, | |
| 95. |
If the closing balance of receivables is less than the opening balance for a month then which one is true out of |
| A. | collections>current purchases, |
| B. | collections>current sales, |
| C. | collections<current purchases, |
| D. | collections < current sales. |
| Answer» B. collections>current sales, | |
| 96. |
If the average balance of debtors has increased, which of the following might not show a change in general? |
| A. | total sales, |
| B. | average payables |
| C. | current ratio |
| D. | bad debt loss. |
| Answer» B. average payables | |
| 97. |
Securitization is related to conversion of |
| A. | receivables, |
| B. | stock, |
| C. | investments, |
| D. | creditors. |
| Answer» A. receivables, | |
| 98. |
80% of sales of 10,00,000 of a firm are on credit. It has a Receivable Turnover of 8. What is the Average collection period (360 days a year) and Average Debtors of the firm? |
| A. | 45 days and 1,00,000, |
| B. | 360 days and 1,00,000, |
| C. | 45 days and 8,00,000 |
| D. | 360 days and 1,25,000. |
| Answer» A. 45 days and 1,00,000, | |
| 99. |
In response to market expectations, the credit pence r j been increased from 45 days to 60 days. This would result in |
| A. | decrease in sales, |
| B. | decrease in debtors, |
| C. | increase in bad debts, |
| D. | increase in average collection period. |
| Answer» D. increase in average collection period. | |
| 100. |
If a company sells its receivable to another party to raise funds, it is known as |
| A. | securitization, |
| B. | factoring, |
| C. | pledging |
| D. | none of the above. |
| Answer» B. factoring, | |
Done Studing? Take A Test.
Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.