Financial Management - Practice Test

[#536] Bonds with deferred call have protection which is classified as

(A) provision protection

(B) call protection

(C) deferred protection

(D) None of the above

Correct Answer

(B) call protection

Explanation

Solution: Bonds with deferred call have protection which is classified as call protection. A call protection is a protective provision of a callable security prohibiting the issuer from calling back the security for a specified period of time.

[#537] Financial Leverage is calculated as:

(A) EBIT ÷ Contribution

(B) EBIT ÷ PBT

(C) EBIT ÷ Sales

(D) EBIT ÷ Variable Cost

Correct Answer

(B) EBIT ÷ PBT

[#538] In lease system, interest is calculated on:

(A) Cash down payment

(B) Cash price outstanding

(C) Hire purchase price

(D) None of the above

Correct Answer

(B) Cash price outstanding

[#539] Which of the following is not true for MM Model?

(A) Share price goes up if dividend is paid

(B) Share price goes down if dividend is not paid

(C) Market value is unaffected by Dividend policy

(D) All of the above

Correct Answer

(C) Market value is unaffected by Dividend policy

[#540] Under income-tax provisions, depreciation on lease asset is allowed to:

(A) Lessor

(B) Lessee

(C) Any of the two

(D) None of the two

Correct Answer

(A) Lessor

Financial Management - Study Mode

[#536] Bonds with deferred call have protection which is classified as

Correct Answer

Explanation

[#537] Financial Leverage is calculated as:

Correct Answer

[#538] In lease system, interest is calculated on:

Correct Answer

[#539] Which of the following is not true for MM Model?

Correct Answer

[#540] Under income-tax provisions, depreciation on lease asset is allowed to:

Correct Answer