Finance MCQs

Page No. 19

In retention growth model, payout ratio is subtracted from one to calculate___________?


aPresent value ratio

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bFuture value ratio

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cRetention ratio

✓


dGrowth ratio

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View Answer Retention ratio

Interest rates, tax rates and market risk premium are factors which an/a_____________?


aIndustry cannot control

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bIndustry cannot control

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cFirm must control

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dFirm cannot control

✓


View Answer Firm cannot control

Double declining balance method and sum of years digits are included in__________?


aYearly method

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bSingle methods

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cDouble methods

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dAccelerated methods

✓


View Answer Accelerated methods

Real rate expected cash flows and nominal rate expected cash flows must be______________?


aAccelerated

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bEqual

✓


cDifferent

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dInflated

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View Answer Equal

Real interest rate and real cash flows do not include_____________?


aEquity effects

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bDebt effects

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cInflation effects

✓


dOpportunity effects

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View Answer Inflation effects

Net investment in operating capital is subtracted from net operating profit after taxes to calculate___________?


aRelevant inflows

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bFree cash flow

✓


cRelevant outflows

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dCash outlay

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View Answer Free cash flow

In cash flow estimation, depreciation is considered as________________?


aCash charge

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bNon cash charge

✓


c Cash flow discounts

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dNet salvage discount

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View Answer Non cash charge

Rate of return which is required to satisfy stockholders and debt holders is classified as__________?


aWeighted average cost of interest

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bWeighted average cost of capital

✓


cWeighted average salvage value

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dMean cost of capital

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In cash flow estimation and risk analysis, real rate will be equal to nominal rate if there is__________?


aNo inflation

✓


bHigh inflation

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cNo transactions

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dNo acceleration

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View Answer No inflation

Weighted average cost of debt, preferred stock and common equity is classified as_____________?


aCost of salvage

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bCost of interest

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cCost of taxation

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dCost of capital

✓


View Answer Cost of capital

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