Financial Management - Study Mode

[#256] In order to calculate the proportion of equity financing used by the company, the following should be used:
Correct Answer

(B) Equity Share Capital plus Reserves and Surplus

[#257] Miller-Orr Model deals with
Correct Answer

(A) Optimum Cash Balance

[#258] Which of the following is studied with the help of financial leverage?
Correct Answer

(D) Financing Risk

[#259] Which of the following is incorrect for NOI?
Correct Answer

(C) k e is constant

[#260] Stockholders that do not get benefits even if company's earnings grow are classified as
Correct Answer

(A) preferred stockholders

Explanation

Solution: Stockholders that do not get benefits even if company's earnings grow are classified as preferred stockholders. Preferred shareholders have priority over common stockholders when it comes to dividends, which generally yield more than common stock and can be paid monthly or quarterly.