Classical

June 2015 - Paper 3

26:  

Let the face value of commercial paper be denoted by F.V., net amount realized from the commercial paper be NAR, maturity period of commercial paper be MP. The effective pre - tax cost of commercial paper shall be:

A.

F.V. - NAR

B.

ugc net management

C.

ugc net management

D.

ugc net management

 
 

Option: D

Explanation :


27:  

When the target company uses the tactic of divestiture, to defend itself from a hostile takeover, it is said to sell the:

A.

Crown jewels

B.

Green mail

C.

Golden parachutes

D.

White knight

 
 

Option: A

Explanation :


28:  

The average spread between the cost of goods sold and the sales revenue is indicated by:

A.

Operating Expense ratio

B.

Gross Profit ratio

C.

Net Profit ratio

D.

Return on Equity

 
 

Option: B

Explanation :


29:  

If the rate of return on investment opportunity is likely to be 15 percent, the opportunity cost of capital is 10 percent, the earnings per share is Rs 10 and if the pay-out ratio is 40 percent, the price of share according to Walter Model will be:

A.

Rs 40

B.

Rs 130

C.

Rs 148

D.

Rs 400

 
 

Option: B

Explanation :


30:  

If the total cash requirement of a company is Rs 2 crore next year, the opportunity cost of funds is 15 percent per annum and the cost of conversion from securities to cash per transaction is Rs 150, the optimum cash balance as per Baumol's Model will be :

A.

Rs 2 lakhs

B.

Rs 4 lakhs

C.

Rs 20 lakhs

D.

Rs 40 lakhs

 
 

Option: A

Explanation :




Suggest an improvement