This quiz works best with JavaScript enabled. Home > Corporate Finance > Corporate Finance > Corporate Finance – Quiz 49 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Corporate Finance Quiz 49 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are Asset Based Lending (ABL) services? A) Providing investments to small businesses. B) Creating and managing mutual funds. C) Providing short-term finance secured on a company's assets. D) Buying and selling stocks and bonds. Show Answer Correct Answer: C) Providing short-term finance secured on a company's assets. 2. In publicly traded firms, the managers are "hired" and "fired" by stockholders and one of the mechanisms used to exercise this control is the annual meeting. Stockholders who are unable to go to the annual meeting can vote by "proxy" , but many of them don't exercise that right. Barring a change in the corporate charter, what happens to these "unvoted" proxies at most US companies? A) They are not counted as votes at the annual meeting. B) There are counted as votes against management at the annual meeting. C) They are counted as votes for the management at the annual meeting. D) They are split evenly for and against management at the annual meeting. E) None of the above. Show Answer Correct Answer: C) They are counted as votes for the management at the annual meeting. 3. An entrepreneur should minimize..... A) Remuneration. B) Number of employees. C) Price. D) Cost. Show Answer Correct Answer: D) Cost. 4. The weighted average cost of capital (WACC) is: A) Average cost of capital calculated according to the proportion of component capital assets. B) Cost of use of each capital source (ki). C) Average cost of capital. D) Sum of component capital assets. Show Answer Correct Answer: A) Average cost of capital calculated according to the proportion of component capital assets. 5. Earn and Learn Company is financed entirely by common stock which is priced to offer a 20% expected return. If the company repurchases 50% of the stock and substitutes an equal value of debt yielding 8%, what is the expected return on the common stock after refinancing? A) 20%. B) 28%. C) 30%. D) 32%. Show Answer Correct Answer: D) 32%. 6. The more frequently interest is compounded the greater the future value A) True. B) False. Show Answer Correct Answer: A) True. 7. Project is accepted when: A) Net present value is greater than zero. B) Internal Rate of Return will be greater than cost of capital. C) Profitability index will be greater than unity. D) Any of the above. Show Answer Correct Answer: D) Any of the above. 8. What is the main goal of corporate finance? A) To maximize shareholder wealth. B) To maximize societal happiness. C) To increase employee satisfaction. D) To diversify the product portfolio. Show Answer Correct Answer: A) To maximize shareholder wealth. 9. Which sister organization of the World Bank provides long term loans at zero interest to the poorest developing countries? A) Asian Development Bank. B) IMF. C) International Developmental Association. D) International Finance CorporationShow Answer. Show Answer Correct Answer: C) International Developmental Association. 10. The Finance needed by business organisation is termed as A) Bonus. B) Capital. C) Shares. D) None of above. Show Answer Correct Answer: B) Capital. 11. What is Initial public offering (IPO)? A) The process of transferring private companies to public companies. B) The process of issuing short-term debt securities. C) The process of issuing long-term debt securities. D) The process of issuing equity securities to the public. Show Answer Correct Answer: D) The process of issuing equity securities to the public. 12. What does short-term liquidity management focus on in corporate finance? A) Tactical planning. B) Strategic planning. C) Current assets and liabilities. D) Long-term investments. Show Answer Correct Answer: B) Strategic planning. 13. What is the future value of an annuity of $ 5, 000 paid annually for 10 years if the interest rate is 6%? A) $ 78, 722.76. B) $ 78, 272.76. C) $ 78, 727.76. D) $ 78, 227.76. Show Answer Correct Answer: D) $ 78, 227.76. 14. Minimum rate of return is called? A) Cost of return. B) Risk and return. C) Trade off. D) Indirect agency cost. Show Answer Correct Answer: A) Cost of return. 15. What is a characteristic of a forward contract? A) Traded on an exchange. B) Negotiated with a counterparty. C) Covers a stream of future payments. D) Must be settled daily. Show Answer Correct Answer: C) Covers a stream of future payments. 16. What is the difference between a money market security and capital market security A) Money Market Securities are short term investments ( e.g. T-Bills, NCDs, Commercial Paper), while Capital Market Securities are long-term investments (e.g. stocks and bonds ). B) Money Market Securities are long-term investments (e.g. T-Bills, NCDs, Commercial Paper), while Capital Market Securities are short-term investments (e.g. stocks and bonds ). Show Answer Correct Answer: A) Money Market Securities are short term investments ( e.g. T-Bills, NCDs, Commercial Paper), while Capital Market Securities are long-term investments (e.g. stocks and bonds ). 17. In general, items of asset in a balance sheet are listed based on: A) Size of the assets. B) Liquidity of the assets. C) Value of the assets. D) Expiration date of the assets. Show Answer Correct Answer: B) Liquidity of the assets. 18. Which agency estimates the national income of India? A) Reserve Bank of India. B) Planning Commission. C) Ministry of Finance. D) Central Statistical Organization. Show Answer Correct Answer: D) Central Statistical Organization. 19. Both leverage ratios adn liquidity ratios deal with cash flow in short and long term A) True. B) False. Show Answer Correct Answer: B) False. 20. The process of planning and managing a firm's long-term investments is called: A) Working capital management. B) Financial depreciation. C) Agency cost analysis. D) Capital budgeting. Show Answer Correct Answer: D) Capital budgeting. ← PreviousNext →Related QuizzesCorporate Finance QuizzesCorporate Finance Quiz 1Corporate Finance Quiz 2Corporate Finance Quiz 3Corporate Finance Quiz 4Corporate Finance Quiz 5Corporate Finance Quiz 6Corporate Finance Quiz 7Corporate Finance Quiz 8Corporate Finance Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books