Financial Management - Study Mode

[#1116] Bonus share are not permitted unless the ____________ shares, if any, are made fully-paid.
Correct Answer

(A) partly paid

Explanation

Solution: Bonus share are not permitted unless the partly paid shares, if any, are made fully-paid. Bonus shares are shares distributed by a company to its current shareholders as fully paid shares free of charge.

[#1117] Net asset value takes into account____________.
Correct Answer

(A) both realized and unrealized capital gains

Explanation

Solution: Net asset value takes into account both realized and unrealized capital gains. The net asset value (NAV) represents the net value of an entity and is calculated as the total value of the entity’s assets minus the total value of its liabilities.

[#1118] A firm will have favourable leverage if its _____ are more than the debt cost
Correct Answer

(D) earnings

Explanation

Solution: A firm will have favourable leverage if its earnings are more than the debt cost. Financial leverage is favorable when the uses to which debt can be put generate returns greater than the interest expense associated with the debt.

[#1119] Which of the following is not an objective of financial management?
Correct Answer

(D) Ensuring discipline in the organization.

Explanation

Solution: Ensuring discipline in the organization. is not an objective of financial management.

[#1120] In uneven cash flow, 'IRR' is an abbreviation of an
Correct Answer

(A) internal rate of return

Explanation

Solution: In uneven cash flow, 'IRR' is an abbreviation of an internal rate of return. The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.