Classical

Financial Management - FInancial Management Questions

16:  

"Shareholder wealth" in a firm is represented by

A.

the number of people employed in the firm.

B.

the book value of the firm's assets less the book value of its liabilities.

C.

the amount of salary paid to its employees.

D.

the market price per share of the firm's common stock.

 
 

Option: D

Explanation :


17:  

Which statement is true about Financial Management?

A.

An option is a claim without any liability

B.

The wealth of a firm is defined as the market price of the firm's stock

C.

The maximisation of profit is often considered as an implies objective of a firm

D.

All of the above

 
 

Option: D

Explanation :


18:  

In the context of imperfect and asymmetric information, how does the stock market react to the signal of a cut in dividend by a company?

A.

The market sells, share price is lowered

B.

The market buys, share price is raised.

C.

The market does not react, price remains the same.

D.

None of the above.

 
 

Option: D

Explanation :


19:  

Which is the assumption of Modigliani and Miller approach to cost of capital?

A.

The capital markets are assumed to be perfect

B.

The firms can be classified into homogeneous risk class

C.

All Investor have the same expectations from a firm's net operating income which is necessary to evaluate the value of a firm

D.

All of the above

 
 

Option: D

Explanation :


20:  

Which is the function of Treasurer?

A.

Management of Pension

B.

Management of Credit

C.

Management of Cash

D.

All of the above

 
 

Option: D

Explanation :




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