Iibm - Financial Management

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Financial Management

Part one:

Multiple choices:

1. The approach focused mainly on the financial problems of corporate enterprise

a. Ignored non-corporate enterprise

b. Ignored working capital financing

c. External approach

d. Ignored routine problems

2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period

a. Cumulative preference shares

b. Non-cumulative preference shares

c. Redeemable preference shares

d. Perpetual shares

3. This type of risk arise from changes in environmental regulations, zoning requirements, fees,licenses and most frequently taxes

a. Political risk

b. Domestic risk

c. International risk

d. Industry risk

4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal

a. Future cost

b. Specific cost

c. Spot cost

d. Book cost

5. This concept is helpful in formulating a sound & economical capital structure for a firm

a. Financial performance appraisal

b. Investment evaluation

c. Designing optimal corporate capital structure

d. None

6. It is the minimum required rate of return needed to justify the use of capital

a. From investors

b. Firms point

c. Capital expenditure point

d. Cost of capital

7. It arises when there is a conflict of interest among owners, debenture holders and the management

a. Seasonal variation

b. Degree of competition

c. Industry life cycle

d. Agency costs

8. Some guidelines on shares & debentures issued by the government that are very important for the constitution of the capital structure are

a. Legal requirement

b. Purpose of finance

c. Period of finance

d. Requirement of investors

9. It is that portion of an...