Financial Management - Study Mode

[#161] Which of the following has helped to eliminate the use of stock certificates by placing stock transactions on computers?
Correct Answer

(A) Demat account

Explanation

Solution: Demat account has helped to eliminate the use of stock certificates by placing stock transactions on computers. Demat Account is an account that is used to hold shares and securities in electronic format. The full form of Demat account is a dematerialised account.

[#162] The expansion of EAR is?
Correct Answer

(A) equivalent annual rate

Explanation

Solution: The expansion of EAR is equivalent annual rate. The Effective Annual Rate (EAR) is the interest rate that is adjusted for compounding over a given period. Simply put, the effective annual interest rate is the rate of interest that an investor can earn (or pay) in a year after taking into consideration compounding.

[#163] The formula for cost of debt is __________.
Correct Answer

(A) I x ( 1 - t)

Explanation

Solution: The formula for cost of debt is I x ( 1 - t).

[#164] Total return is equal to________.
Correct Answer

(A) capital gain and yield

Explanation

Solution: Total return is equal to capital gain and yield. Total return is the amount of value an investor earns from a security over a specific period, typically one year, when all distributions are reinvested.

[#165] Traditional theorists believe that.
Correct Answer

(A) there exists an optimal capital structure

Explanation

Solution: Traditional theorists believe that there exists an optimal capital structure. An optimal capital structure is the objectively best mix of debt, preferred stock, and common stock that maximizes a company's market value while minimizing its cost of capital.