Financial Management - Study Mode
[#366] Free cash flow is Rs 15000, operating cash flow is Rs 3000, investment outlay cash flow is Rs 5000 then salvage cash flow will be
Correct Answer
(C) Rs 7,000.00
Explanation
Solution: salvage cash flow = Free cash flow - Investment outlay cashflow - Operating cash flow = 15000 - 5000 - 3000 = Rs. 7000.
[#367] Stock market theory which states that stocks are in equilibrium and impossible for investors to beat market is classified as an
Correct Answer
(B) efficient market hypothesis
Explanation
Solution: Stock market theory which states that stocks are in equilibrium and impossible for investors to beat market is classified as an efficient market hypothesis. The Efficient Market Hypothesis, or EMH, is an investment theory whereby share prices reflect all information and consistent alpha generation is impossible.
[#368] Growth in earnings per share is primarily resultant of growth in
Correct Answer
(A) dividends
Explanation
Solution: Growth in earnings per share is primarily resultant of growth in dividends. Earnings per share growth is defined as the percentage change in normalised earnings per share over the previous 12 month period to the latest year end. It gives a good picture of the rate at which a company has grown its profitability.
[#369] In expected rate of return for constant growth, capital gains is divided by capital gains yield to calculate
Correct Answer
(C) beginning price
Explanation
Solution: In expected rate of return for constant growth, capital gains is divided by capital gains yield to calculate beginning price. Beginning market value (BMV) is the valuation at which a property or investment should exchange at the date of origination, and then at the beginning of each subsequent period.
[#370] Stock which has fixed payments and failure of payments which do not lead to bankruptcy is classified as
Correct Answer
(B) preferred stock
Explanation
Solution: Stock which has fixed payments and failure of payments which do not lead to bankruptcy is classified as preferred stock. Preferred stock refers to a class of ownership that has a higher claim on assets and earnings than common stock has.