Classical

Financial Management - Financial Management Multiple Choice Questions

26:  

Degree of operating leverage can be computed by

A.

% change in Operating Income/% change in sales

B.

% Sales/% Profit

C.

Sales/Cost of Production

D.

Sales/Fixed Cost

 
 

Option: A

Explanation :


27:  

Given

Ke = DPS/MP x 100, this formula may be used in

A.

Calculating capital structure

B.

Reserve

C.

Depreciation

D.

Calculating Cost of Equity Share Capital

 
 

Option: D

Explanation :


28:  

Which formula may be used for 'EPS'?

A.

Net Profit/100 x Share Capital

B.

Dividend/Net Profit x 100

C.

Net Income - Dividend on Preferred Stock/Average outstanding Shares

D.

Net Profit/Sales

 
 

Option: C

Explanation :


29:  

Empirical evidence on acquisitions indicates - excess returns on average to the shareholders of the selling company, and _______ excess returns on average to those of the buying company.

A.

no; no

B.

substantial; no

C.

no; substantial

D.

substantial; substantial

 
 

Option: B

Explanation :


30:  

Factoring involves

A.

Purchase and Collection of debts

B.

Sales ledger management

C.

Provision of Specialised Services relating to credit investigation

D.

All of the above

 
 

Option: D

Explanation :




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