Classical

Financial Accounting - Financial Accounting MCQ

31:  
The cost of capital declines when the degree of financial leverage increases 'who advocated it'.
A.

Net operating income approach

B.

Net income approach

C.

Modigliani - Miller approach

D.

Traditional Approach

 
 

Option: B

Explanation :


32:  

The formula , ((1 - ti) EPS / MP )  X 100 , may be used for

A.

cost of equity capital

B.

cost of retained earnings

C.

cost of preference share capital

D.

cost of debt capital

 
 

Option: B

Explanation :


33:  

Cost of depreciation fund computed as

A.

Long term loan capital

B.

Dividend

C.

Short term loan capital

D.

Profit

 
 

Option: A

Explanation :


34:  
Dividend policy of a company mainly concern with
(i) dividend payout and
(ii) Stability of dividend
A.

Only (i) is correct

B.

Only (ii) is correct

C.

Both (i) and (ii) are correct.

D.

Both (i) and (ii) are incorrect.

 
 

Option: C

Explanation :


35:  
Discounted cash flow criteria for investment appraisal does not include
A.

Not present value

B.

Benefit cost ratio

C.

Accounting rate of return

D.

Internal rate of return

 
 

Option: B

Explanation :




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