Classical

December 2013 - Paper2

31:  
Which one of the following is not among the assumptions of the Modigliani-Miller model ?
A.

Perfect capital market

B.

Equivalent risk classes

C.

Unity for dividend payout rario

D.

Absence of taxes

 
 

Option: B

Explanation :


32:  
The most suitable coverage ratio for deciding the debt capacity of a firm is
A.

Interest Coverage Ratio

B.

Cash Flow Coverage Ratio

C.

Debt Service Coverage Ratio

D.

Fixed Assets Coverage Ratio

 
 

Option: C

Explanation :


33:  
Which one of the following is the most popular method for estimating the cost of equity
A.

Capital asset pricing model

B.

Dividend yield method

C.
Gordon's dividend discount model
D.

Earnings field method

 
 

Option: D

Explanation :


34:  
Which one of the following is not the internal factor affecting the weighted average cost of capital of a firm ? 
A.

Investment policy of the firm

B.

Capital strucrure of the firm

C.

Dividend policy followed

D.

Market risk premium for the firm

 
 

Option: D

Explanation :


35:  
Most common approach for analysing the capital structure of a firm is
A.

Ratio Analysis

B.

Cash Flow Analysis

C.

Comparative Leverage AnalysisAnalysis

D.

Leverage Analysis

 
 

Option: A

Explanation :




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