Financial Management - Study Mode

[#476] Ratio of Net Income to Number of Equity Shares known as:
Correct Answer

(C) Earnings per Share

[#477] Capital budgeting decisions are analyzed with help of weighted average and for this purpose
Correct Answer

(C) cost of capital is used

Explanation

Solution: Capital budgeting decisions are analyzed with help of weighted average and for this purpose cost of capital is used. Capital budgeting is a company's formal process used for evaluating potential expenditures or investments that are significant in amount.

[#478] A formula of after-tax component cost of debt is
Correct Answer

(A) interest rate-tax savings

Explanation

Solution: A formula of after-tax component cost of debt is interest rate-tax savings. Cost of debt refers to the effective rate a company pays on its current debt. In most cases, this phrase refers to after-tax cost of debt, but it also means the company's cost of debt before taking taxes into account.

[#479] Risk free rate is subtracted from expected market return is considered as
Correct Answer

(C) equity risk premium

Explanation

Solution: Risk free rate is subtracted from expected market return is considered as equity risk premium. Equity risk premium refers to the excess return that investing in the stock market provides over a risk-free rate.

[#480] Type of variability in which a project contributes in return of company is considered as
Correct Answer

(D) Both B and C

Explanation

Solution: Type of variability in which a project contributes in return of company is considered as variable risk and within firm risk.