Financial Management - Study Mode

[#266] Tax-rate is relevant and important for calculation of specific cost of capital of:
Correct Answer

(C) Debentures

[#267] Which of the following is not applicable to commercial paper:
Correct Answer

(D) None of the above

[#268] NPV of a proposal, as calculated by RADR real CE Approach will be:
Correct Answer

(B) Unequal

[#269] Stock market theory which states that stocks are in equilibrium and impossible for investors to beat market is classified as an
Correct Answer

(B) efficient market hypothesis

Explanation

Solution: Stock market theory which states that stocks are in equilibrium and impossible for investors to beat market is classified as an efficient market hypothesis. The Efficient Market Hypothesis, or EMH, is an investment theory whereby share prices reflect all information and consistent alpha generation is impossible.

[#270] Growth in earnings per share is primarily resultant of growth in
Correct Answer

(A) dividends

Explanation

Solution: Growth in earnings per share is primarily resultant of growth in dividends. Earnings per share growth is defined as the percentage change in normalised earnings per share over the previous 12 month period to the latest year end. It gives a good picture of the rate at which a company has grown its profitability.