Financial Management - Study Mode

[#91] Dividends paid to common shareholders and divided by common shares outstanding are equals to
Correct Answer

(B) dividends per share

Explanation

Solution: Dividends paid to common shareholders and divided by common shares outstanding are equals to dividends per share. Dividend per share (DPS) is the sum of declared dividends issued by a company for every ordinary share outstanding. The figure is calculated by dividing the total dividends paid out by a business, including interim dividends, over a period of time by the number of outstanding ordinary shares issued.

[#92] Future value of interest if it is calculated two times a year can be a classified as
Correct Answer

(D) semi-annual compounding

Explanation

Solution: Future value of interest if it is calculated two times a year can be a classified as semi-annual compounding. A semiannual event happens twice a year, typically every six months.

[#93] Payment if it is divided with interest rate will be formula of
Correct Answer

(B) present value of perpetuity

Explanation

Solution: Payment if it is divided with interest rate will be formula of present value of perpetuity. A perpetuity is a type of annuity that receives an infinite amount of periodic payments. An annuity is a financial instrument that pays consistent periodic payments. As with any annuity, the perpetuity value formula sums the present value of future cash flows.

[#94] An earning before interest, taxes, depreciation and amortization are calculated by
Correct Answer

(A) subtracting operating cost from net sales

Explanation

Solution: An earning before interest, taxes, depreciation and amortization are calculated by subtracting operating cost from net sales. Earnings before interest and taxes is a measure of a firm's profit that includes all incomes and expenses except interest expenses and income tax expenses.

[#95] Until word of preferred is used, an equity in balance sheet is treated as
Correct Answer

(A) common equity

Explanation

Solution: Until word of preferred is used, an equity in balance sheet is treated as common equity. Common equity is the amount that all common shareholders have invested in a company. Most importantly, this includes the value of the common shares themselves.