Business Finance MCQs

Which of the following statements are correct regarding profit maximization as the primary goal of the firm?

The explicit costs (in case of cost of debt capital) are measured by the interest rate only adjusted by the

Who formulated the following model for estimating the market price of equity share? $$P = \frac{{D + \frac{{{R_A}}}{{{R_C}}}\left( {E - D} \right)}}{{{R_C}}}$$ Where, P = Market price of equity share D = DPS E = EPS E - D = Retained earnings per share RA = Internal rate of return on investment RC = Cost of capital

The amount of current assets that varies with seasonal requirements is referred to as

If a firm raises Rs. 1,00,000 by the issue of debentures at 10%, repayable after 10 years, the rate of return that equates the present value of cash inflows with the present value of cash outflows is referred to as

The Dutch auction as a method appliesin India. Which method of stock repurchase occurs when the buyer seeksbids within a specified price range and accepts the lowest price that will allow it to acquire the entire block of securities desired?

If a company goes for a new issue of debentures, what is the impact of such development? 1. The volatility of the returns of equity in relation to a market index is likely to be affected. 2. The beta may rise. 3. The gearing ratio will rise.

In deciding the optimal level of current assets for the firm, a company has to confront with which of the following situation?

"The cost of capital is the minimum rate of return which a firm requires as a condition for undertaking an investment." This definition is given by