Financial Management - Study Mode

[#986] In expected rate of return for constant growth, dividends are expected to grow but with the
Correct Answer

(A) constant rate

Explanation

Solution: In expected rate of return for constant growth, dividends are expected to grow but with the constant rate. The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR).

[#987] Expected capital gain is Rs 20 and expected final price is Rs 50 then original investment will be
Correct Answer

(A) Rs 30.00

Explanation

Solution: Investment = Final price - Capital gain = 50 - 20 = 30

[#988] Preferred dividend is Rs 60 and required rate of return is 20% then value of preferred stock will be
Correct Answer

(D) Rs 300.00

Explanation

Solution: Value of preferred stock = Dividend/required rate of return x 100 = 60/20 x 100 = 300

[#989] An earning before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as
Correct Answer

(A) entity multiple

Explanation

Solution: An earning before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as entity multiple. Enterprise multiple, also known as the EV multiple, is a ratio used to determine the value of a company. The enterprise multiple looks at a firm in the way that a potential acquirer would by considering the company's debt.

[#990] Capital budgeting decisions are analyzed with help of weighted average and for this purpose
Correct Answer

(C) cost of capital is used

Explanation

Solution: Capital budgeting decisions are analyzed with help of weighted average and for this purpose cost of capital is used. Capital budgeting is a company's formal process used for evaluating potential expenditures or investments that are significant in amount.