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Sunday, 7 April 2019

Corporate Finance Quiz

Corporate Finance multiple choice question (MCQs) Page-3. These quizzes are from corporate finance, personal finance, and public finance. Find answers to the questions at the bottom of the page.

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21. The mixture of debt and equity, used to finance a corporation is also known as
(A) capital structure
(B) capital budgeting
(C) investing
(D) treasury
22. The present value of $100 expected in two years from today at a discount rate of 5% is
(A) $105
(B) $110.7
(C) $95
(D) $90.7
23. What will be value of $100 after two years, if the interest rate during this period is 5%?
(A) $105
(B) $107.5
(C) $110.25
(D) $95
24. Investors require higher return on
(A) levered equity
(B) unlevered equity
(C) both levered and unlevered
(D) bond equity
25. In a well-functioning capital market if the firm pays no taxes then what is better about borrowing?
(A) Borrowing is not a good idea in this case
(B) No difference who (firm or shareholders) borrows
(C) It is better that the firm borrows
(D) It is better that the shareholders borrow
26. Corporations can return cash to their shareholders by
(A) paying cash dividends
(B) stock repurchase
(C) both A and B
(D) none of these
27. Which from the following is true about stock repurchases?
(A) Repurchases are more flexible
(B) Repurchases are tax-advantaged
(C) both A and B
(D) none of these
28. What should be the goal of a corporation?
(A) to maximize the profit of the shareholders
(B) to maximize the value of the corporation
(C) both A and B
(D) to take care of the interests of the management
29. The money a investor receive for taking on a risk is called
(A) risk premium
(B) risk free rate
(C) option value
(D) arbitrage
30. An asset that pays a fixed amount of cash each year for a specified number of years is called
(A) perpetuity
(B) dividend
(C) liquidity
(D) annuity
21. A
22. D
23. C
24. A
25. B
26. C
27. C
28. C
29. A
30. D

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