Capital structure means Over capitalisation means Huge promotion expense leads to A business established during depression period can be A high geared company… Optimum capital structure…. FRICT analysis includes Financial leverage is.. Degree of financial leverage Financial break even point in the level of activity where The appropriate objective of an enterprise is The job of a finance manager is.. Financial decision involves According to traditional approach finance fnction refers to Business finance is a part of .. Ploughing back of profit means Capital budgeting means What is financial plan+ Fixed capital requirement refers to Optimum capital structure is the combination of debt and equity which Floatation cost means Financial leverage and trading on equity are Indifference point in the level of activity where Financial break even point is Operating leverage refers to use of .. Dividend Distribution Tax is payable by Which of the following is not true for MM Model In order to calculate the proportion of equity financing used by the company, the following should be used: Which of the following sources of funds has an Implicit Cost of Capital? In case the firm is all-equity financed, WACC would be equal to: Cost of Capital for Government securities is also known as: Cost of Capital for Bonds and Debentures is calculated on: Weighted Average Cost of Capital is generally denoted by: Which of the following cost of capital require tax adjustment? Which is the most expensive source of funds? .Marginal cost of capital is the cost of: Relationship between change in Sales and d Operating Profit is known as: In case of partially debt-financed firm, k0 is less In order to calculate Weighted Average Cost of weights may be based on: Firm's Cost of Capital is the average cost of: An implicit cost of increasing proportion of debt is: Combined leverage can be used to measure the relationship between: Which of the following is true? Cost of capital may be defined as: Minimum Rate of Return that a firm must earn in order to satisfy its investors, is also known as: Cost of Capital for Equity Share Capital does not imply that: Higher FL is related the use of: The term capital structure denotes: Debt Financing is a cheaper source of finance because of: In order to find out cost of equity capital under CAPM, which of the following is not required: Tax-rate is relevant and important for calculation of specific cost of capital of: Advantage of Debt financing is: Cost of issuing new shares to the public is known as: Cost of Equity Share Capital is more than cost of debt because: Which of the following is not a generally accepted approach for Calculation of Cost of Equity? Operating leverage helps in analysis of: Which of the following is studied with the help of financial leverage? Financial Break-even level of EBIT is one at which: Cost of Redeemable Preference Share Capital is: A Executive and incidental finance function Financial structure Excess capital Under capitalisation Under capitalised Equity will be more than debt Maximum cost of capital fund, risk, interest, control and time EBIT/EBT % change in EPS/% change in EBIT EBIT will be zero Maximisation of sales Raising of funds investment,financing and divident decision Utilisation of fund Personal finance Proper utilisation of profits Preparation of budgets for raising capital Statement of deficiency of total amount of capital Working capital Maximise the market value of the firm Csot of raising funds Same EBIT will be the same for alternative financial plan Equel to interest Fixed cost Shareholders to Government Share price goes up if dividend is paid Authorised Share Capital, Equity Share Capital, Cost of Debt Risk-free Rate of Interest, Before Tax basis kA, Cost of Equity Shares, New Equity Shares, Additional Sales, Financial Leverage, Kd Market Values All sources Tax should would not be available on new debt, EBIT and EPS Retained earnings are cost free, Weighted Average cost of all debts, Average Return on Investment, (c) Market Price is equal to Book Value of share, Higher Equity, Total of Liability side of Balance Sheet, Time Value of Money, Beta Factor Equity Share Capital Interest is tax-deductible Cost of Equity, Face value of debentures is more than face value of shares, CAPM Business Risk Marketing Risk, EPS is one Rate of Dividend, B Routine and auxilary finance function Capitalisation Earnings are not justified by th institution Over capitalisation Over Capitalised Debt will be more than Equity Maximum market value of shares flexibilty, risk, income, control and time EBT/EBIT % change in EBT/% change in ebt EBTwill ne zero Maximisation of profit Management of Cash investment, sales and financing decision Procurement of funds Public finance Raising profit by using debt funds Making investment decision in long term expenditure A statement showing total amount of capital to be raised Long term capital Minimise cost of capital Cost of utilising funds different terms EPS will be the same for alternaive financial plan Interest+(DP/1-T) Variqble cost Shareholders to Company Share price goes down if dividend is not paid Equity Share Capital plus Reserves and Surplus, Preference Share Capital, Cost of Equity Maximum Rate of Return After Tax basis kw, Cost of Preference Shares, New Preference Shares, Additional Funds, Operating Leverage Ke Target Values All borrowings P.E. Ratio would increase, PAT and EPS External Equity is cheaper than Internal Equity, Rate of Return expected by Equity Shareholders, Weighted Average Cost of Capital, Shareholders are ready to subscribe to right issue, Higher Debt, Equity Funds, Preference Capital and Long term Debt, Rate of Interest, Market Rate of Return Preference Share Capital, It reduces WACC, Cost of Capital, Equity shares have higher risk than debt, Dividend Discount Model Financing Risk, Interest Rate Risk, EPS is zero After Tax Rate of Dividend, C Incidential and routine finance function make up of capitalisation Capital is more than debt Optimum capitalisation Proper capitalised Long term liability more than current liability Maximum market value of firm fund,return,investment,capital and taxation EAIT/EBT % change in EAIT/ % change in EBT EPS will be zero Maximisation of wealth Raising and effective utilisation of funds investment, divident and cash decision Procurement and utilisation of fund Private finance Keeping profit for paying future divident Making investment decision in working capital A statement showing different sources of finance both a and b both a and b Cost of raising and utilising funds don'nt know Financial break even point occurs both a and b Total cost Company to Government Market value is unaffected by Dividend policy Equity Share Capital plus Preference Share Capital, Debentures, Neither (a) nor (b) Rate of Interest on Fixed Deposits Risk-free Rate of Interest basis,. k0, Cost of Debentures, New Debts, Additional Interests, Net Profit Ratio Both (a) and (b Book Values Share capital Equity shareholders would demand higher return, Sales and EPS Retained Earnings are cheaper than External Equity, Average IRR of the Projects of the firm, Net Profit Ratio Market Price is more than Issue Price, Lower Debt, Total Shareholders Equity, Tax-deductibility of Interest, Market Price of Equity Share Debentures, Does not dilute owners control, Flotation Cost, Equity shares are easily saleable, Rate of Pref. Dividend Plus Risk Production Risk Foreign Exchange Risk EPS is Infinite Discount Rate that equates PV of inflows and out-flows relating to capital, D Auxilary and subsidiary finance function Share capital capital is more than assets High rate of interest All of the above Assets more than liability Maximum market value of debt finance,return, investment,control and taxation EAIT/EBIT % change in EPS/% change in EAIT EBIT and EBT will be the same Maximisation of production management of fund utilisation investment,finance and cash decision None of the above None of the above Keeping profit for meeting future finance requirements All of the above None of the above None of the above None of the above None of the above No Comment No difference between EBIT and EPS None of the above All of the above Holding to Subsidiary Company All of the above Equity Share Capital plus Long-term Debt. Retained earnings. Both (a) and (b). None of the above None of the above kc, Cost of Retained Earnings. Retained Earnings. None of the above. Gross Profit Ratio None of the above. All of the above Share Bonds & Debentures. Rate of Return of the company would decrease Sales and EBIT Retained Earnings are costlier than External Equity. Minimum Rate of Return that the firm should earn. Average Cost of borrowing. Any of the three options. None of the above Types of Capital Issued by a Company. Dividends not Payable to lenders. Risk-free Rate of Interest. (a) and (b) above. All of the above. Marginal Cost of Capital. All of the three above. Price-Earnings Ratio. Credit Risk Financing risk EPS is Negative. None of the above. Correct Answer Weightage Module option1 5 1 option3 4 1 option2 3 1 option2 4 1 option1 5 1 option2 2 1 option3 1 1 option2 3 1 option1 1 1 option1 2 1 option3 4 1 option3 5 1 option3 5 1 option1 4 1 option2 1 1 option3 5 1 option4 4 1 option4 3 1 option1 2 1 option2 1 1 option3 2 1 option1 3 1 option1 1 1 option2 3 1 option3 4 1 option 1 5 option2 4 2 option3 5 2 option2 3 2 option4 2 2 option2 3 2 option1 2 2 option2 1 2 option3 1 2 option3 2 2 option1 1 2 option2 1 2 option2 3 2 option2 3 2 option4 2 2 option1 2 2 option3 3 2 option3 3 2 option3 4 2 option4 3 2 option2 3 2 option4 4 2 option2 2 2 option2 1 2 option3 1 2 option3 5 2 option3 4 2 option4 1 2 option3 1 2 option2 2 2 option3 2 2 option1 2 2 option4 4 2 option2 2 2 option3 1 2