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Capital Structure Quiz 2 (30 MCQs)

Quiz Instructions

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1. If a company issues bonds worth 1, 000 billion kip, ask how the company will record the list?
2. How does the business cycle affect capital structure decisions for Arnav, Riyaan, and Krish?
3. An enterprise that divides its registered capital into equal shares, has the right to freely transfer shares through the stock market. What kind of enterprise is that?
4. Floatation cost refers to
5. If return on investment is 10 % and rate of interest is 12% then which source of fund should be used for maximizing shareholder's wealth.
6. What is the concept of 'tax shield' in the context of MM's theorem with taxes (1963)?
7. A company made an issue for cash of 1, 000, 000 50c shares at a premium of 30c per share.Which one of the following journal entries correctly records the issue?
8. In Q.2 If Who have 10 % of shares of levered firm then what is value of firm and value of your 10 % Shares in firm
9. When Return on Investment (ROI) is high, which option should Aisha, Kiara, and Saisha choose?
10. A rise in the general level of prices is called?
11. The value of a company with debt is the same as the value of a company without debt is a statement of.....
12. A financial manager makes a choice of the amount and source of capital based on how the choice will impact the .....
13. A company Weigthed average cost of capital includes:
14. Which component of capital structure determines the financial risk?
15. M&M Proposition II with taxes suggests that:
16. Which of the following should appear in a company's statement of changes in equity?(1) Total comprehensive income for the year (2) Amortisation of capitalised development costs (3) Surplus on revaluation of non-current assets
17. Financial risk is:
18. Which is an example of an internal source of finance?
19. The longer the working capital cycle takes to complete, the ..... working capital a firm will need.
20. O'Brien Inc. has the following data:rRF = 5.00%; RPM = 6.00%; and b = 1.05. What is the firm's cost of equity from retained earnings based on the CAPM?
21. An analyst gathered the following information about a private company and itspublicly traded competitor.The estimated equity beta for the private company is closest to:
22. LaPango Inc. estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 8%, and its above-average risk projects have a WACC of 12%. Which of the following projects (A, B, and C) should the company accept?
23. When debt increase:i-firm value increases ii-probability of default decreases iii-interest tax shield increases
24. Trade-off theory assumes .....
25. How does growth and change affect capital structure in a nonprofit organization?
26. What does Modigliani-Miller I (MM I) in a world with no taxes states?
27. A corporation borrows P1, 000, 000 at 10% annual rate of interest. The firm has 40% tax rate. The yearly, after-tax cost of this debt is
28. A capital structure theories which suggest that a firm can lower its weighted average cost of capital and increase its market value by the judicious use of financial leverage.
29. Which of the following could be turned into cash the easiest or quickest?
30. The cost of preferred stock to a firm must be adjusted to an after-tax figure because 70% of dividends received by a corporation may be excluded from the receiving corporation's taxable income.
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