MCQOPTIONS
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MCQOPTIONS
This section includes 3 Mcqs, each offering curated multiple-choice questions to sharpen your Business Finance knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Capital structure and leverage decisions come in the ambit of |
| A. | investment decisions |
| B. | distribution decisions |
| C. | financing decisions |
| D. | dividend decisions |
| Answer» D. dividend decisions | |
| 2. |
Arrange the following financing choices in order of preference suggested by the pecking order theory(A) Reinvestment of earnings(B) New issue of equity(C) issue of debtChoose the correct answer from the options given below: |
| A. | (A), (B), (C) |
| B. | (A), (C), (B) |
| C. | (B), (C), (A) |
| D. | (B), (A), (C) |
| Answer» C. (B), (C), (A) | |
| 3. |
Match List I with List II List I Capital StructurePreposition(s) List IIDescription(s)A. Target Capital structure I. Expected yield on the equity capital is equal to the pure equity return plus a premium for financial riskB. Optimum Capital Structure II. It refers to the perceived costs due to increased ratio of debt in the firm.C. Cost of financial distressIII. It is the debt ratio the firm strives to achieveD. MM preposition-IIIV. It is the debt-equity ratio that maximises the value of the firm.Choose the correct answer from the options given below: |
| A. | A - II, B - III, C - I, D - IV |
| B. | A - III, B - IV, C - II, D - I |
| C. | A - IV, B - II, C - III, D - I |
| D. | A - I, B - III, C - II, D - IV |
| Answer» C. A - IV, B - II, C - III, D - I | |