JUNE 2013 - Paper 2

16:  
Which ratio explains that how much portion of earning is distributed in the form of dividend?
A.

Dividend - Debt Ratio

B.

Equity - Debt Ratio

C.

Pay-out Ratio

D.

Earning - Yield Ratio

 
 

Option: B

Explanation :

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17:  
Modem approach to financial management is
 I. The total fund requirement of the firm.
II. The asset to be acquired.
Ill. Payment of dividend to shareholders.
A.

I only

B.

II only

C.

II and III only

D.

I , II and III

 
 

Option: B

Explanation :

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18:  
Participating preference shares are those which participate in the
A.

general meeting of the company

B.

voting

C.

profits over and above their fixed dividend

D.

management of the company

 
 

Option: C

Explanation :

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19:  
Which of the following is one of the critical assumptions of Walters' Model?
A.
All financing is done through retained earnings; external sources of funds like debt or new equity capital are not used.
B.
The retention ratio, once decided upon, is constant. Thus, the growth rate, (g = br) is also constant.
C.
The capital markets are perfect and the investors behave rationally.
D.

All of the above

 
 

Option: C

Explanation :

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20:  
This consists of two lists of statements or terms and the candidate has to match an item in one list with an item in the other:

        List – I (Statement)

           List – II (Terms)

a. Preventing hostile takeover

1. Management buyout

b. Leveraged buyout

2. Green mail

c. Accounting for merger

3. Pooling of interest

d. Financing for merger

4. Organizing work into the tasks required to perform a specific job.

 

A.

a  b   c   d

1  2   3   4

B.

a  b   c   d

2  1   4   3

C.

a  b   c   d

2   1   3   4

D.

a  b   c   d

3   4   2   1

 
 

Option: C

Explanation :

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