Which of the following is the cheapest source of financing available to a firm?

Related Mcqs:

1. Which of the following terms refers to the use of debt financing?

   A. Operating Leverage
   B. Financial Leverage
   C. Manufacturing Leverage
   D. None of the given options

2. A major facet of financial management involves providing the financing necessary to support:

   A. Liabilities
   B. Debts
   C. Loans
   D. Assets

3. ___________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.

   A. Financial management
   B. Profit maximization
   C. Agency theory
   D. Social responsibility

4. A firm has paid out Rs. 150,000 as dividends from its net income of Rs. 250,000. What is the retention ratio for the firm?

   A. 12%
   B. 25%
   C. 40%
   D. 60%

5. A firm reports total liabilities of Rs. 300,000 and owner’s equity of Rs. 500,000. What would be the total worth of the firm’s assets?

   A. Rs. 300,000
   B. Rs. 500,000
   C. Rs. 800,000
   D. Rs. 1100,000

6. Which of the following is the process of planning and managing a firm‟s long-term investments?

   A. Capital Structuring
   B. Capital Rationing
   C. Capital Budgeting
   D. Working Capital Management

7. Which of the following is the overall return the firm must earn on its existing assets to maintain the value of the stock?

   A. IRR (Internal Rate of Return)
   B. MIRR (Modified Internal Rate of Return)
   C. WACC (Weighted Average Cost of Capital)
   D. AAR (Average Accounting Return)

8. Which of the following ratios are intended to address the firm’s financial leverage?

   A. Liquidity Ratios
   B. Long-term Solvency Ratios
   C. Asset Management Ratios
   D. Profitability Ratios

9. Which of the following set of ratios relates the market price of the firm’s common stock to selected financial statement items?

   A. Liquidity Ratios
   B. Leverage Ratios
   C. Profitability Ratios
   D. Market Value Ratios

10. Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date?

    A. Income Statement
    B. Balance Sheet
    C. Cash Flow Statement
    D. Retained Earning Statement