Financial Management - Study Mode

[#146] The relationship between potential unsystematic risk and reward is given by ___________.
Correct Answer

(A) Excess return to beta ratio

Explanation

Solution: The relationship between potential unsystematic risk and reward is given by excess return to beta ratio. Beta Ratio refers to the efficiency in which a given filter element removes particles of a given size.

[#147] A technique uses in comparative analysis of financial statement is
Correct Answer

(C) common size analysis

Explanation

Solution: A technique uses in comparative analysis of financial statement is common size analysis. Common size, or vertical analysis, is a method of evaluating financial information by expressing each item in a financial statement as a percentage of a base amount for the same time period. A company can use this analysis on its balance sheet or its income statement.

[#148] Net income available to stockholders is Rs 125 and total assets are Rs 1,096 then return on common equity would be
Correct Answer

(B) 11.40%

Explanation

Solution: Net income available to stockholders = 125 Total assets = 1,096 Return on common equity rate shows the net income earned per every rupee invested.It acts as a yardstick of profitability. Return on common equity = (net income - preferential stock)/Average common stock holder's equity No further information is available = (125/1096)×100 = 11.4051 ℅

[#149] Price per share is Rs 30 and an earning per share is Rs 3.5 then price for earning ratio would be
Correct Answer

(A) 8.57 times

Explanation

Solution: Price for earning ratio = Price per share ÷ Earning per share = Rs 30 ÷ Rs 3.5 = 8.57 times

[#150] What is Economic Order Quantity?
Correct Answer

(D) Optimum order size