Finance MCQs

Page No. 19

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


aPresent value ratio


bFuture value ratio


cRetention ratio


dGrowth ratio


View Answer Retention ratio

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


aIndustry cannot control


bIndustry cannot control


cFirm must control


dFirm cannot control


View Answer Firm cannot control

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


aYearly method


bSingle methods


cDouble methods


dAccelerated methods


View Answer Accelerated methods

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


aAccelerated


bEqual


cDifferent


dInflated


View Answer Equal

Real interest rate and real cash flows do not include_____________?


aEquity effects


bDebt effects


cInflation effects


dOpportunity effects


View Answer Inflation effects

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


aRelevant inflows


bFree cash flow


cRelevant outflows


dCash outlay


View Answer Free cash flow

In cash flow estimation, depreciation is considered as________________?


aCash charge


bNon cash charge


c Cash flow discounts


dNet salvage discount


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


bWeighted average cost of capital


cWeighted average salvage value


dMean cost of capital



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


aNo inflation


bHigh inflation


cNo transactions


dNo acceleration


View Answer No inflation

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


aCost of salvage


bCost of interest


cCost of taxation


dCost of capital


View Answer Cost of capital

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