Financial Management - FInancial Management Questions

11:  

Which is the determinants of Capital Structure?

A.

Requirement of Investors

B.

Control

C.

Tax

D.

Government Policy

 
 

Option: D

Explanation :

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12:  

The cost of monitoring management is considered to be a (an)

A.

bankruptcy cost.

B.

transaction cost.

C.

agency cost.

D.

institutional cost.

 
 

Option: C

Explanation :

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13:  

One potential problem with sensitivity analysis is that it generally looks at sensitivity "one variable at a time." However, one way to judge the sensitivity of results to simultaneous changes in two variables, at least, is to construct an _________.

A.

NPV profile

B.

NPV sensitivity matrix

C.

NPV sensitivity graph

D.

All of the above

 
 

Option: B

Explanation :

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14:  

A call provision, a sinking fund, and/or conversion are used to retire

A.

bonds and preferred stock.

B.

bonds and common stock.

C.

preferred stock and common stock.

D.

only common stock.

 
 

Option: A

Explanation :

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15:  

Pay back reciprocal computed by

A.

Annual Cash Inflow/100

B.

Cash/Annual Cash Inflow

C.

Annual Cash Inflow/Total Investment

D.

Profit/Sales x 100

 
 

Option: C

Explanation :

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