|
1) A markets which deals with long-term corporate stocks are classified as a. Liquid markets b. Short-term markets c. Capital markets d. Money markets
|
||||
|
2) Bonds issued to individuals by corporations are classified as__________? a. Municipal bonds b. Corporate bonds c. U.S treasury bonds d. Mortgages
|
||||
|
3) Markets dealing loans of autos, education, vacations and appliances are considered as__________? a. Consumer credit loans b. Commercial markets c. Residential markets d. Mortgage markets
|
||||
|
4) Capital gain expected by stockholders and dividends are included in____________? a. Debt rate b. Investment return c. Interest rate d. Cost of equity
|
||||
|
5) In weighted average cost of capital, rising in interest rate leads to_________________? a. Increase in cost of debt b. Increase capital structure c. Decrease in cost of debt d. Decrease capital structure
|
||||
|
6) Forecast by analysts, retention growth model and historical growth rates are methods used for an______________? a. Estimate future growth b. Estimate option future value c. Estimate option present value d. Estimate growth ratio
|
||||
|
7) An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax__________? a. Term structure b. Market premium c. Risk premium d. Cost of debt
|
||||
|
8) In weighted average cost of capital, capital components are funds that usually offer by____________? a. Stock market b. Investors c. Capitalist d. Exchange index
|
||||
|
9) Capital budgeting decisions are analyzed with help of weighted average and for this purpose____________? a. Component cost is used b. Common stock value is used c. Cost of capital is used d. Asset valuation is used
|
||||
|
10) Risk free rate is subtracted from expected market return is considered as___________? a. Country risk b. Diversifiable risk c. Equity risk premium d. Market risk premium
|
||||
|
11) Beta which is estimated as regression slope coefficient is classified as___________? a. Historical beta b. Market beta c. Coefficient beta d. Riskier beta
|
||||
|
12) In weighted average capital, capital structure weights estimation does not rely on value of__________? a. Investors equity b. Market value of equity c. Book value of equity d. Stock equity
|
||||
|
13) Method uses for an estimation of cost of equity is classified as___________? a. Market cash flow b. Future cash flow method c. Discounted cash flow method d. Present cash flow method
|
||||
|
14) Variability for expected returns for projects is classified as___________? a. Expected risk b. Stand-alone risk c. Variable risk d. Returning risk
|
||||
|
15) A risk associated with project and way considered by well diversified stockholder is classified as______________? a. Expected risk b. Beta risk c. Industry risk d. Returning risk
|
||||
|
16) During planning period, a marginal cost for raising a new debt is classified as__________? a. Debt cost b. Relevant cost c. Borrowing cost d. Embedded cost
|
||||
|
17) If coupon rate is more than going rate of interest, then bond will be sold________? a. More than its par value b. Seasoned par value c. At par value d. Below its par value
|
||||
|
18) Type of bond in which payments are made on basis of inflation index is classified as_____________? a. Borrowed bond b. Purchasing power bond c. Surplus bond d. Deficit bond
|
||||
|
19) Price of an outstanding bond decreases when market rate is_______________? a. Increased b. Decreased c. Earned d. Never changed
|
||||
|
20) Right held with corporations to call issued bonds for redemption is considered as___________? a. Artificial provision b. Call provision c. Redeem provision d. Original provision
|
||||
|
21) Required rate of return in calculating bond’s cash flow is also classified as_______? a. Going rate of return b. Yield c. Earning rate d. Both A and B
|
||||
|
22) If default probability is zero and bond is not called, then yield to maturity is_____________? a. Mature expected return rate b. Lower than expected return rate c. Higher than expected return rate d. Equal to expected return rate
|
||||
|
23) Cash flows that could be generated from an owned asset by company but not use in project are classified as_________________? a. Occurred cost b. Mean cost c. Opportunity costs d. Weighted cost
|
||||
|
24) Relevant cash flow which company expects when its will implement project is classified as_____________? a. Irrelevant cash flow b. Relevant cash flow c. Incremental cash flow d. Decrease cash flow
|
||||
|
25) Nominal interest rates and nominal cash flows are usually reflected the____________? a. Inflation effects b. Opportunity effects c. Equity effects d. Debt effects
|
||||
|
26) In cash flow estimation, depreciation shelters company’s income from_______? a. Expansion b. Salvages c. Taxation d. Discounts
|
||||
|
27) Weighted average cost of debt, preferred stock and common equity is classified as_____________? a. Cost of salvage b. Cost of interest c. Cost of taxation d. Cost of capital
|
||||
|
28) In cash flow estimation and risk analysis, real rate will be equal to nominal rate if there is__________? a. No inflation b. High inflation c. No transactions d. No acceleration
|
||||
|
29) Rate of return which is required to satisfy stockholders and debt holders is classified as__________? a. Weighted average cost of interest b. Weighted average cost of capital c. Weighted average salvage value d. Mean cost of capital
|
||||
|
30) In cash flow estimation, depreciation is considered as________________? a. Cash charge b. Non cash charge c. Cash flow discounts d. Net salvage discount
|
||||
