Financial Management - Study Mode

[#306] Dividend Payout Ratio is:
Correct Answer

(B) DPS ÷ EPS

[#307] 5Cs of the credit does not include:
Correct Answer

(D) None of the above

[#308] Securitization is related to conversion of:
Correct Answer

(A) Receivables

[#309] If coupon rate is less than going rate of interest then bond will be sold
Correct Answer

(B) more than its par value

Explanation

Solution: If coupon rate is less than going rate of interest then bond will be sold more than its par value. Most bonds have fixed coupon rates, meaning that no matter what the national interest rate may be and regardless of marker fluctuation the annual coupon payments remain static.

[#310] Type of provision which allows an orderly retirement of an issued bond which is classified as
Correct Answer

(D) sinking fund provision

Explanation

Solution: Type of provision which allows an orderly retirement of an issued bond which is classified as sinking fund provision. A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt.