MCQOPTIONS
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MCQOPTIONS
This section includes 146 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Management Studies (BMS) knowledge and support exam preparation. Choose a topic below to get started.
| 101. |
National Ltd. Has 12,000 equity shares of Rs.100 each. Sale price is equity share Rs.115 per share; flotation cost Rs.5 per share. Expected dividend growth rate is 5% and expected dividend at the end of the financial year is Rs.11 per share, What is the cost of equity shares of National Ltd? |
| A. | 0.1133 |
| B. | 0.1278 |
| C. | 0.1475 |
| D. | 0.15 |
| Answer» E. | |
| 102. |
In weighted average cost of capital, rising in interest rate leads to- |
| A. | increase in cost of debt |
| B. | increase the capital structure |
| C. | decrease in cost of debt |
| D. | decrease the capital structure |
| Answer» B. increase the capital structure | |
| 103. |
Which of the following is not a risk factor in capital budgeting ? |
| A. | industry specific risk factors |
| B. | competition risk factors |
| C. | project specific risk factors |
| D. | interest risk factors |
| Answer» C. project specific risk factors | |
| 104. |
Which of the following is not included in incremental A flows? |
| A. | opportunity costs |
| B. | sunk costs |
| C. | change in working capital |
| D. | inflation effect |
| Answer» B. sunk costs | |
| 105. |
Savings in respect of a cost is treated in capital budgeting as: |
| A. | an inflow |
| B. | an outflow |
| C. | nil |
| D. | as one |
| Answer» B. an outflow | |
| 106. |
Evaluation of Capital Budgeting Proposals is based on Cash flows because: |
| A. | cash flows are easy to calculate |
| B. | cash flows are suggested by sebi |
| C. | cash is more important than profit |
| D. | cash flows are unable to prepared |
| Answer» D. cash flows are unable to prepared | |
| 107. |
Which of the following methods focuses the maximisation of wealth of shareholders? |
| A. | accounting rate of return |
| B. | payback period |
| C. | profitability index |
| D. | internal rate of return |
| Answer» D. internal rate of return | |
| 108. |
Which of the following method of evaluation of capital budgeting proposals focuses on liquidity? |
| A. | internal rate of return |
| B. | net present value |
| C. | accounting rate of return |
| D. | payback period |
| Answer» E. | |
| 109. |
Payback period Technique is based on |
| A. | all cash flows |
| B. | only higher cash flows |
| C. | earlier cash flows |
| D. | selected cash flows |
| Answer» D. selected cash flows | |
| 110. |
In case of Mutually Exclusive proposals |
| A. | only the best project is selected |
| B. | all projects with positive npv is are selected |
| C. | even negative npv project may be selected |
| D. | at least two proposals are selected |
| Answer» B. all projects with positive npv is are selected | |
| 111. |
The abbreviation "SIP" in a mutual fund stands for----- |
| A. | simple investment plan |
| B. | systematic investment plan |
| C. | small investment plan |
| D. | social investment programme |
| Answer» C. small investment plan | |
| 112. |
An ideal liquid ratio must be ----- |
| A. | 1 : 1 |
| B. | 1 : 2 |
| C. | 2 : 1 |
| D. | 1.33 : 1 |
| Answer» B. 1 : 2 | |
| 113. |
Which of the following is a security on a moveable property? |
| A. | pledge |
| B. | mortgage |
| C. | hypothecati on |
| D. | lien |
| Answer» D. lien | |
| 114. |
Time value of Money is based on the principle of: |
| A. | a stich in time saves nine |
| B. | a bird in hand; is worth two in a bush. |
| C. | as you sow; so shall you reap. |
| D. | hard work pays in the long run |
| Answer» C. as you sow; so shall you reap. | |
| 115. |
Decision involving purchase of fixed assets are also termed as: |
| A. | capital structure decisions. |
| B. | capital budgeting |
| C. | capital restructurin g |
| D. | capital mix decisions |
| Answer» C. capital restructurin g | |
| 116. |
A Balance Sheet tallies; because: |
| A. | it is based on double entry system of accounting |
| B. | it is based on single entry system of accounting. |
| C. | all accounts are computerise d. |
| D. | total of assets equals to the total of liabilities |
| Answer» B. it is based on single entry system of accounting. | |
| 117. |
A merchant banker------- |
| A. | is a bank of merchants and businessmen. |
| B. | provides loan to merchants. |
| C. | accepts deposits from merchants. |
| D. | renders corporate advisory services. |
| Answer» E. | |
| 118. |
…… increases the number of shares without actually increasing the paid - up value of the share capital. |
| A. | consolidation of shares. |
| B. | stock split- ups |
| C. | bonus issue |
| D. | rights issue |
| Answer» C. bonus issue | |
| 119. |
Rights issue is also called as ----- |
| A. | privileged subscription. |
| B. | equity shares |
| C. | stock dividend. |
| D. | bonus shares |
| Answer» B. equity shares | |
| 120. |
In the Balance-sheet----- stock is indicated |
| A. | opening |
| B. | closing |
| C. | average |
| D. | finished goods |
| Answer» C. average | |
| 121. |
Which of the followings is an item of Current Liability? |
| A. | bank balance |
| B. | bank overdraft |
| C. | cash balance |
| D. | unsecured loans |
| Answer» C. cash balance | |
| 122. |
Commercial papers is a type of |
| A. | fixed coupon bond |
| B. | unsecured short term debt |
| C. | equity share capital |
| D. | governmen t bond |
| Answer» C. equity share capital | |
| 123. |
TCs Ltd. acquires HCL Ltd., MPS of HCL Ltd. Is Rs.20 and EPS is Rs. 5 for an exchange ratio of 1.5: 1, what was the PE ratio used in acquiring HCL Ltd.? |
| A. | rs. 4 |
| B. | rs. 5 |
| C. | rs. 6 |
| D. | rs. 2.67 |
| Answer» D. rs. 2.67 | |
| 124. |
ABC Ltd. acquires hundred percent of preference share capital of PQR Ltd. It would result in |
| A. | hostile takeover bid |
| B. | vertical merger |
| C. | no relationship |
| D. | holding subsidiary relationshi p |
| Answer» E. | |
| 125. |
PQR Ltd. Is a profit-making company. It is absorbed into another group company XYZ Ltd. Which is a loss Company. This case is off |
| A. | hostile takeover bid |
| B. | horizontal merger |
| C. | reverse merger |
| D. | takeover |
| Answer» D. takeover | |
| 126. |
Which of the following is not applicable to IRR? |
| A. | considers all cash flows |
| B. | based on time value of money |
| C. | common for all projects |
| D. | stated in % return |
| Answer» D. stated in % return | |
| 127. |
A shareholder invests in a Company's Shares mainly------ |
| A. | for capital appreciation |
| B. | to receive dividends. |
| C. | to receive bonus and rights shares |
| D. | to receive interest on investment regularly. |
| Answer» B. to receive dividends. | |
| 128. |
Members of recognised stock exchanges are termed as |
| A. | brokers |
| B. | underwriters |
| C. | shareholder s |
| D. | lead managers. |
| Answer» B. underwriters | |
| 129. |
Traditionally UTI was a----- |
| A. | bank |
| B. | mutual fund. |
| C. | financial institution |
| D. | insurance company |
| Answer» C. financial institution | |
| 130. |
Goodwill is an example of ---- asset |
| A. | tangible. |
| B. | intangible. |
| C. | fictitious |
| D. | current |
| Answer» C. fictitious | |
| 131. |
SEBI Act was passed in the year------ |
| A. | 1956 |
| B. | 1988 |
| C. | 1992 |
| D. | 1947 |
| Answer» D. 1947 | |
| 132. |
…... shares are issued free of cost |
| A. | equity |
| B. | rights |
| C. | preference. |
| D. | bonus |
| Answer» E. | |
| 133. |
The abbreviation "IPO" stands for----- |
| A. | indian public offer |
| B. | indian post office |
| C. | initial private offer |
| D. | initial public offering. |
| Answer» E. | |
| 134. |
An ideal current ratio must be------ |
| A. | 2 : 1 |
| B. | 1 : 2 |
| C. | 1 : 1 |
| D. | 2.5 : 1 |
| Answer» B. 1 : 2 | |
| 135. |
Present Value of a Rupee is always: |
| A. | equal to its future value. |
| B. | greater than its future value. |
| C. | less than its future value |
| D. | is not related to its future value |
| Answer» D. is not related to its future value | |
| 136. |
Cash credit and overdrafts is considered as NPA when is remains out of order for more than: |
| A. | 90 days |
| B. | 30 days |
| C. | 60 days |
| D. | 45 days |
| Answer» B. 30 days | |
| 137. |
The policy in which less dividend is paid is |
| A. | liberal dividend policy |
| B. | conservative dividend policy |
| C. | stable dividend policy |
| D. | fluctuating dividend policy |
| Answer» C. stable dividend policy | |
| 138. |
Provision for standard asset in respect of advances to commercial Real Estate sector is |
| A. | 1% |
| B. | 2% |
| C. | 2% |
| D. | 0% |
| Answer» E. | |
| 139. |
Loans upto Rs. 1,00,000 against gold and silver ornaments carry risk |
| A. | 50% |
| B. | 10% |
| C. | 100% |
| D. | 20% |
| Answer» C. 100% | |
| 140. |
The models known as bird in the hand argument |
| A. | gordon\s model |
| B. | walter\s model |
| C. | fayol’s model |
| D. | henry model |
| Answer» B. walter\s model | |
| 141. |
Banks in India have to achieve C.A. Ratio of |
| A. | 9% |
| B. | 15% |
| C. | 5% |
| D. | 10% |
| Answer» B. 15% | |
| 142. |
The % of provision on unsecured portion of doubtful asset is: |
| A. | 125% |
| B. | 100% |
| C. | 75% |
| D. | 25% |
| Answer» C. 75% | |
| 143. |
The % of provision required on sub-standard asset on secured portion is: |
| A. | 15% |
| B. | 12% |
| C. | 10% |
| D. | 5% |
| Answer» B. 12% | |
| 144. |
Amalgamation is governed by |
| A. | as 14 |
| B. | as 3 |
| C. | as 21 |
| D. | as 32 |
| Answer» B. as 3 | |
| 145. |
The first taxonomy for financial reporting was released on |
| A. | 30th june,2003 |
| B. | 31st july,2000 |
| C. | 26th january, 2003 |
| D. | 15th august, 2009 |
| Answer» C. 26th january, 2003 | |
| 146. |
Ploughing back of profit means |
| A. | declaration of dividend |
| B. | retainning profits |
| C. | re-investing profits |
| D. | building reserves |
| Answer» C. re-investing profits | |