Classical

Financial Management - Financial Management Objective Questions

31:  

The finance function is/are

A.

Determination of finance requirement of the firm

B.

Obtaining necessary finance from the appropriate sources at minimum possible cost

C.

The allocation of finance in different assets

D.

All of the above

 
 

Option: D

Explanation :

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32:  

Payback reciprocal method of ranking investment proposals should be used only when

A.

Annual savings are even for the entire period

B.

The economic life of the project is at least twice of the pay back period

C.

Annual Saving is less

D.

(a) and (b) both

 
 

Option: D

Explanation :

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33:  

The market price of a share of common stock is determined by

A.

the board of directors of the firm.

B.

the stock exchange on which the stock is listed.

C.

the president of the company.

D.

None of these

 
 

Option: C

Explanation :

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34:  

The decision function of financial management can be broken down into the decisions.

A.

financing and investment

B.

!investment, financing, and asset management

C.

financing and dividend

D.

capital budgeting, cash management, and credit management

 
 

Option: B

Explanation :

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35:  

In a simple perfect capital market, what happens if dividends are delayed?

A.

Share price goes up.

B.

It is impossible to know

C.

Share price goes down.

D.

Share price remains the same.

 
 

Option: D

Explanation :

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