Financial Management - Study Mode

[#286] Value of stock is Rs 900 and required rate of return is 30% then preferred dividend will be
Correct Answer

(A) Rs 270.00

Explanation

Solution: Preferred dividend = Value of stock * Required rate of return = Rs. 900 * 30% = Rs. 270.

[#287] A situation in which an outside group solicit proxies to take control of business is classified as
Correct Answer

(C) proxy fight

Explanation

Solution: A situation in which an outside group solicit proxies to take control of business is classified as proxy fight. A proxy fight is the action of a group of shareholders joining forces, in a bid to gather enough shareholder proxies to win a corporate vote.

[#288] A stock which is issued to meet specific needs of company is considered as
Correct Answer

(A) classified stock

Explanation

Solution: A stock which is issued to meet specific needs of company is considered as classified stock. Classified stock is a type of common stock that has special privileges, such as enhanced voting rights or dividend rights.

[#289] A point where profile of net present value crosses horizontal axis at plotted graph indicates project
Correct Answer

(C) internal rate of return

Explanation

Solution: A point where profile of net present value crosses horizontal axis at plotted graph indicates project internal rate of return. The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.

[#290] Modified rate of return and modified internal rate of return with exceed cost of capital if net present value is
Correct Answer

(A) positive

Explanation

Solution: Modified rate of return and modified internal rate of return with exceed cost of capital if net present value is positive. The modified internal rate of return is a financial measure of an investment's attractiveness. It is used in capital budgeting to rank alternative investments of equal size. As the name implies, MIRR is a modification of the internal rate of return and as such aims to resolve some problems with the IRR.