Financial Management - Study Mode

[#276] In expected rate of return for constant growth, an expected yield on capital must be
Correct Answer

(D) equal to expected growth rate

Explanation

Solution: In expected rate of return for constant growth, an expected yield on capital must be equal to expected growth rate. Growth rates typically represent the compounded annualized rate of growth of a company's revenues, earnings, dividends or even macro concepts, such as gross domestic product (GDP) and retail sales. Expected forward-looking or trailing growth rates are two common kinds of growth rates used for analysis.

[#277] Capital gain is Rs 2 and beginning price is Rs 24 then capital gains yield will be
Correct Answer

(D) 12.00%

Explanation

Solution: Capital gains yeild = Beginning price / Capital gain = 24 / 2 = 12.00%.

[#278] A formula such as an original investment plus an expected capital gain is used to calculate
Correct Answer

(C) expected final stock price

Explanation

Solution: A formula such as an original investment plus an expected capital gain is used to calculate expected final stock price.

[#279] Book value is_______________.
Correct Answer

(C) the accounting value of the firm as reflected in the financial statements

Explanation

Solution: Book value is the accounting value of the firm as reflected in the financial statements. Book value is also the net asset value of a company calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

[#280] To whom does the Treasurer most likely report?
Correct Answer

(A) Chief Financial Officer

Explanation

Solution: To Chief Financial Officer, the Treasurer most likely report. The chief financial officer (CFO) is the officer of a company that has primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financial reporting.