11 Jun 2014

Smu mba finance management sample paper set four










Question:
Under Walter's approach , if the firm's rate of return r is greater than its cost of capital k, the firm's has
Response:
The obligation to pay higher dividend
Should have chosen
The option to retain the earnings for better & profitable investment opportunities
Right to retain all the earnings
Right to distribute all the earnings as dividend
Question:
What are the components of shareholder's return?
Response:
Interest on investment, capital appreciation
Dividends on equities & preference capital
Capital gains or capital loss
Correct
Dividends and capital gains
Question:
Dividends are that portion of a firm's __________ paid to the shareholders
Response:
Capital reserves
Resources & surplus
Correct
Net earnings
Net worth
Unit 15 Mark 2
Question:
Gordon's dividend capitalization model has the following assumption. Choose the irrelevant assumption:
Response:
The firm is an all equity firm with no debt
Should have chosen
The capital structure of the firm is equally divided into equity capital and debt capital
The life of the firm a indefinite
The cost of capital is greater than growth rate (br)
Question:
Anticipated sales Rs.110,000,000, variable cost 0.8, anticipated relaxation in discount 2/10, net 30, the discount cost is Rs ________.
Response:
16,00,000
Should have chosen
12,60,000
10,20,000
10,60,000
Unit 15 Mark 1
Question:
Which approach of dividend policy emphasis the relationship between the dividends and the stock market.
Response:
Walter model
Gordon model
Should have chosen
Graham & Dodd model
Miller & Modigliani model
Question:
What is the relationship between dividend payout and retained earnings?
Response:
Higher the dividend payout, higher the retained earnings
Should have chosen
Higher the dividend payout, lower the retained earnings
Lower the dividend payout , higher the retained earnings
Lower the dividend payout, lower the retained earnings
Question:
Under traditional approach the stock value responds positively to high dividends and negatively to low dividends. The market price p is represented by .
Response:
= [ m (D + E)/3)]
Should have chosen
= [ m (D + E/3)]
= [ m +(D + E/3)]
= [ m - (D + E/3)]
Question:
In MM theory formula 'ke' refers to ________
Response:
Cost of debt
Cost of preference
Should have chosen
Cost of equity
Cost of capital

No comments:

Post a Comment