Corporate Finance MCQ With Answers

20 Questions | By AniruddhaT | Updated: Jun 7, 2022 | Attempts: 6169

Questions

Settings

Corporate Finance MCQ With Answers - Quiz

Hello and welcome to this short and interesting 'corporate finance MCQ quiz with answers' that is given below. We have created this quiz to test your knowledge about corporate finance and its related concepts. So, if you think you have a good understanding of this topic, then you must take this quiz. Let's see how well you can score. So, you are ready to take this test? Wishing you the best of luck!

Questions and Answers

1.

At the interest rate of 15%, the 2 years discounting factor will be
- A.
  
  0.7561
- B.
  
  0.8697
- C.
  
  0.9651
- D.
  
  1.1225
2.

The firm's investment decision is also called as the
- A.
  
  Financing Decision
- B.
  
  Capital Budgeting Decision
- C.
  
  Liquidity Decision
- D.
  
  Dividend Decision
3.

As far as their value is concerned, the top priority group in company should be
- A.
  
  Shareholders
- B.
  
  Employees
- C.
  
  Board of Directors
- D.
  
  Governing Body
4.

Normally the Cost of Capital should be -----
- A.
  
  Equal to IRR
- B.
  
  Less than IRR
- C.
  
  More than IRR
- D.
  
  Corresponding to IRR
5.

Modigliani Miller Approach highlights the following aspect in dividend decisions
- A.
  
  Rate of Dividend
- B.
  
  Company tendency to retain earnings
- C.
  
  Zero impact of market prices of shares
- D.
  
  Shareholders' expectations
6.

From the following, which is not the direct middleman in the capital market ?
- A.
  
  Rating Agencies
- B.
  
  Broker
- C.
  
  Banker
- D.
  
  Trustee
7.

The term Over or Under Subscription is used in case of ---
- A.
  
  Bank Financing
- B.
  
  Public Issue
- C.
  
  Non Performing Assets
- D.
  
  Syndicate Financing
8.

If the present value of cash flow X is Rs.200 & that of Y is Rs.150, the combined present value of cash flows will be --
- A.
  
  Rs.200
- B.
  
  Rs.150
- C.
  
  Rs.50
- D.
  
  Rs.350
9.

Limited Liability is main feature of ---
- A.
  
  Sole Proprietorship
- B.
  
  Partnership
- C.
  
  Corporations
- D.
  
  N G O
10.

The Steel Authority Of India sold out 5% of their stake to private players & raised $ 275 Million. This is popularly called as --
- A.
  
  Business Strategy
- B.
  
  Business Valuation
- C.
  
  Disinvestment
- D.
  
  Foreign Direct Investment
11.

A formula of X-Y/Z is used for calculating the -- of Business Assets
- A.
  
  Book Value
- B.
  
  Market Value
- C.
  
  Fair Value
- D.
  
  Liquidation Value
12.

In ascertaining the EVA, the following component is to be considered.
- A.
  
  Earnings Before Tax
- B.
  
  Earnings After Tax & Interest
- C.
  
  Earnings after Tax excluding Interest
- D.
  
  Profits After Taxes
13.

Annuity is defined as -
- A.
  
  Equal cash flows at equal intervals of time at a specific period
- B.
  
  Equal cash flows at equal intervals of time forever
- C.
  
  Unequal cash flows at equal intervals of time forever
- D.
  
  Unequal cash flows at equal intervals of time for specific period
14.

The creditors of company are usually interested in observing the --
- A.
  
  Liquidity Ratio
- B.
  
  Solvency Ratio
- C.
  
  Profitability Ratio
- D.
  
  Turnover Ration
15.

From the following, which is not considered as the financial asset ?
- A.
  
  Common Stock
- B.
  
  Patents
- C.
  
  Bonds
- D.
  
  Preferred Stock
16.

Short Term Period in business is generally ___________.
- A.
  
  Less than 3 Months
- B.
  
  Less than 6 Months
- C.
  
  Less than a year
- D.
  
  Less than 5 years
17.

The Finance Controller is responsible for the following except
- A.
  
  Preparation & interpretation of Financial Statements
- B.
  
  Internal Auditing
- C.
  
  Tax Management
- D.
  
  Raising of Funds for business
18.

Financial leverage of the company is ascertaining by using..
- A.
  
  Liquidity Ratio
- B.
  
  Long Term Solvency Ratio
- C.
  
  Turnover Ratio
- D.
  
  Profitability Ratio
19.

Quick Ratio indicates the ..
- A.
  
  Profitability of the company
- B.
  
  Cash position of the company
- C.
  
  Capital Structure of the company
- D.
  
  None of the above
20.

Any speculative stock having high probability in future is seem to be ---- today.
- A.
  
  High, Negative & Under-priced
- B.
  
  High, Negative & Overpriced
- C.
  
  High, Positive & Overpriced
- D.
  
  Low, Negative & Overpriced