Business Finance-Capital Structure (NTA-NET (Based on NTA-UGC) Commerce (Paper-II)): Questions 1 - 4 of 4

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Question number: 1

» Business Finance » Capital Structure » NI, NOI, Traditional, MM Approach (New 2019)

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Appeared in Year: 2010

MCQ▾

Question

Over capitalization may not be as a result of which one of the following? (December Paper-2)

Choices

Choice (4) Response

a.

Promotion of a company with inflated assets

b.

Shortage of capital

c.

Application of low capitalization rate

d.

Liberal dividend policy

Question number: 2

» Business Finance » Capital Structure » NI, NOI, Traditional, MM Approach (New 2019)

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Appeared in Year: 2019

MCQ▾

Question

MM Hypothesis for capital structure is based on which of the following assumptions?

(June Paper-2)

(1) Investors are rational and have homogeneous expectations

(2) Perfect capital market

(3) retention of profits

(4) No taxes

Which of the following options is most appropriate?

Choices

Choice (4) Response

a.

(1), (2), (4)

b.

(1), (2), (3), (4)

c.

(1), (3), (4)

d.

(2), (3), (4)

Question number: 3

» Business Finance » Capital Structure » NI, NOI, Traditional, MM Approach (New 2019)

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Appeared in Year: 2019

Assertion-Reason▾

Question

Assertion (Ꭺ)

According to Net Income (NI) Approach, capital structure decision is relevant in the valuation of a firm. (June)

Reason (Ꭱ)

A firm can change its total value and its overall cost of capital by change in the degree of leverage in its capital structure.

Choices

Choice (4) Response

a.

Ꭺ is true but Ꭱ is false

b.

Both Ꭺ and Ꭱ are true and Ꭱ is the correct explanation of Ꭺ

c.

Both Ꭺ and Ꭱ are false

d.

Ꭺ is false but Ꭱ is true

Question number: 4

» Business Finance » Capital Structure » NI, NOI, Traditional, MM Approach (New 2019)

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Appeared in Year: 2019

Match List-Ⅰ List-Ⅱ▾

Question

Match List I with List II: (June)

List-Ⅰ (Column-I) List-Ⅱ (Column-II)

(A)

Internal Rate of Return

(i)

Inventory Management

(B)

Reorder Level

(ii)

Dividend theory

(C)

Net Income Approach

(iii)

Capital structure theory

(D)

Gordon Model

(iv)

Capital Budgeting

Choices

Choice (4) Response
  • (A)
  • (B)
  • (C)
  • (D)

a.

  • (iii)
  • (iv)
  • (ii)
  • (i)

b.

  • (iii)
  • (ii)
  • (iv)
  • (i)

c.

  • (iv)
  • (i)
  • (iii)
  • (ii)

d.

  • (i)
  • (iii)
  • (ii)
  • (iv)

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