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This section includes 15 Mcqs, each offering curated multiple-choice questions to sharpen your Master of Commerce (MDotcom) knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
According to . principle the ideal pattern of capital structure is one that tends to minimize the cost of financing. |
| A. | Control principle |
| B. | Cost principle |
| C. | Risk principle |
| D. | Flexibility principle |
| Answer» C. Risk principle | |
| 2. |
.principle says that issue of debt and preference shares do not affect the interest of equity share holders. |
| A. | Cost principle |
| B. | Risk principle |
| C. | Control principle |
| D. | Timing principle |
| Answer» D. Timing principle | |
| 3. |
Operating lease is favoured by the lessee in respect of assets which depreciate in value on account of .. |
| A. | Obsolescence |
| B. | Wear and tear |
| C. | Exhaustion |
| D. | Fire |
| Answer» B. Wear and tear | |
| 4. |
A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and operate the remaining assets more efficiently is engaging in __________. |
| A. | Strategic acquisition |
| B. | Two tier tender offer |
| C. | A financial acquisition |
| D. | Shark repellent |
| Answer» B. Two tier tender offer | |
| 5. |
The lessee can protect himself against obsolescence by entering into a capital lease agreement with the lessor. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» C. none | |
| 6. |
..is a long term lease and the lessee will be paying much more than the cost of the property or equipment to the lessor in the form of lease charges. |
| A. | Operating lease |
| B. | Financial lease |
| C. | Leveraged lease |
| D. | Direct lease |
| Answer» C. Leveraged lease | |
| 7. |
is the combination of two or more organisation in a related industry but do not offer same product. |
| A. | Horizontal |
| B. | Vertical |
| C. | Concentric |
| D. | Conglomerate |
| Answer» D. Conglomerate | |
| 8. |
is the process under which an existing large company purchases the business of another small company doing similar business. |
| A. | Merger |
| B. | Acquisition |
| C. | Absorption |
| D. | Take over |
| Answer» D. Take over | |
| 9. |
The acquisition of a firm in the same industry, but at a different stage of the production process is called |
| A. | Conglomerate |
| B. | Forward |
| C. | Vertical |
| D. | Horizontal |
| Answer» D. Horizontal | |
| 10. |
.. isa type of takeover in which the acquiring company turns itself into a subsidiary of the purchased company. |
| A. | Bailout takeover |
| B. | Reverse takeover |
| C. | Backflip |
| D. | Conglomerate |
| Answer» D. Conglomerate | |
| 11. |
. is the ratio in which an acquiring company will offer its own shares in exchange for the target company s share during merger . |
| A. | Swap ratio |
| B. | Price- earnings ratio |
| C. | Exchange ratio |
| D. | Enterprise value to sales ratio |
| Answer» B. Price- earnings ratio | |
| 12. |
This strategy enables the existing shareholders of the target company to buy additional shares at a high discount rate. |
| A. | Flip- in |
| B. | Flip over |
| C. | Spin out |
| D. | Spin off. |
| Answer» B. Flip over | |
| 13. |
The process by which company or organisation is divided and thereby becomes an independent business is called .. |
| A. | Spin out |
| B. | Spin off |
| C. | Split off |
| D. | Sell off |
| Answer» B. Spin off | |
| 14. |
..isan acquisition in which management team of the company purchases assets and operation they manage. |
| A. | LBO |
| B. | MBO |
| C. | Demerger |
| D. | Stubs |
| Answer» C. Demerger | |
| 15. |
A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and operate the remaining assets more efficiently is engaging in __________. |
| A. | Strategic acquisition |
| B. | A financial acquisition |
| C. | Two tier tender offer |
| D. | Shark repellent |
| Answer» C. Two tier tender offer | |