vu fin622 Final Term - Quiz No.16
vu fin622 Corporate Finance Quiz
This quiz belongs to book/course code vu fin622 Corporate Finance of vu organization. We have 17 quizzes available related to the book/course Corporate Finance. This quiz has a total of 10 multiple choice questions (MCQs) to prepare and belongs to topic Final Term. NVAEducation wants its users to help them learn in an easy way. For that purpose, you are free to prepare online MCQs and quizzes.
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Question 1: current assets of company exceed its current liabilities, then the company will have:
A positive net working capital
A negative working capital
A net working capital of less than zero
A net working capital equal to zero
Question 2: If sensitivity analysis concludes that the largest impact on profits would come from changes in the sales level, then which of the following recommendations should be considered?
Fixed costs should be traded for variable costs
Variable costs should be traded for fixed costs.
The project should not be undertaken.
Additional marketing analysis may be beneficial before proceeding.
Question 3: The purpose of Weighted Average Cost of Capital is to measure:
The cost of debt
The cost of equity
The cost of capital
The cost of sales
Question 4: Which of the following changes will occur if a bonds yield-to-maturity increases, keeping other things equal?
Its price will rise
Its price will remain unchanged
Its price will fall.
Can not be determined
Question 5: You have calculated that the required rate of return on a particular common stock is less than the expected rate of return. Therefore, you would conclude:
That the stock is more risky than the market portfolio.
That an investor should buy the stock.
That the stock has a high dividend payout ratio.
That an investor should sell the stock.
Question 6: Which of the following measures systematic risk of a firm's common stock?
CAPM
BETA
MM-Model
SML
Question 8: Which of the following describes the hedging approach to financing?
Maturity dates of financing instruments are spread over a period of time so that they mature in a steady, predictable fashion
Each asset is offset with a financing instrument of the same approximate maturity.
Each asset is offset with a put or call option.
The firm takes out insurance to protect itself against uneven cash flows.
Question 10: An increase in the firms receivable turnover ratio means that __________.
It has initiated more liberal credit terms with no increase in sales
It is collecting credit sales more quickly than before
Cash sales have decreased
Inventories have increased
