The finance manager has to focus his attention on the following aspects to maximise the shareholders wealth Select one: O a. Procuring the funds at the lowest cost, Investing the funds in those assets, which are more profitable and Distributing the dividends to the shareholders to meet their expectations O b. None of the options O c. Procuring the funds as and when necessary, at the lowest cost O d. Distributing the dividends to the shareholders to meet their expectations O e. Investing the funds in those assets, which are more profitable

The finance manager has to focus his attention on the following aspects to maximise the shareholders wealth Select one: O a. Procuring the funds at the lowest cost, Investing the funds in those assets, which are more profitable and Distributing the dividends to the shareholders to meet their expectations O b. None of the options O c. Procuring the funds as and when necessary, at the lowest cost O d. Distributing the dividends to the shareholders to meet their expectations O e. Investing the funds in those assets, which are more profitable

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1) The benefit enjoyed by a sole trader includes (a) Easy to get loan from financial institutions (b) Shares can be sold but only to a selected individuals (c) The owner has limited liability (d) Profits need not be shared 2) The primary goal of financial management is to (a) Maximise returns (b) Minimise risk (c) Maximise shareholders wealth (d) Implement cost cutting measures 3) The internal rate of return is calculated by (a) Finding the project which gives the highest return (b) Calculating the anticipated risks of the project (c) Calculating how fast the capital is recovered (d) Calculating the discount factor when the NPV becomes zero 4) Cash flow is a better way to measure income compared to profits because (a) Profits can be manipulated (b) Easier to trace cash flow (c) There are non-cash related item in determining profit (d) Accrual accounting can be confusing 5) Cash flow is a better way to measure income compared to profits because (a) Profits can be manipulated (b) Easier…
A) Which of the following statement is correct Select one: a. Capital structure is a method of analyzing and comparing substantial future investments and expenditures to determine which ones are most worthwhile b. Capital structure of a company may comprise of Equity Share Capital, Preference Share Capital and Debentures c. Capital expenditure decisions do not involve commitment of large sums of money d. Working capital refers to the mix of different sources of long-term funds e. None of the statement is correct B) The cost of capital of capital of Raysut Cement is 7.12% and the cost of capital of Oman cement is 8.52%. Which company would you choose and why Select one: a. None b. Oman Cement because Profit is high c. Oman Cement because cost is high d. Raysut Cement because cost is low e. Raysut Cement because profit is high
If managers of a company have inside information about the company’s future performances and such inside information is unknown to outsiders, then the company’s managers are most likely to use _____ to finance its project investment Group of answer choices a. the company’s retained earnings b. debt borrowing from banks c. share issuance to new investors d. there is no difference among the above three funding options
The primary goal of financial management is Select one: a. Increasing the owners wealth b. Reducing risk c. None of these d. Increasing profit
11. Which of the following security holders receives a lower returns with low risk? . T-Bill B. Common shareholders C. Stakeholders D. Creditors 12. The advantage of a company compared a sole trader as form of business organisation is: A. Quick decision making B. Access to external professional management skills C. Use of own funds D. Inability to access external funds Thank you!!!
6. The primary goal of the Financial Manager is: A. minimizing risk B. maximizing profit C. maximizing wealth D. minimizing returns
One of the following statement is true about strategies of liquidity management Select one: O a. Asset Liquidity Management or Asset Conversion Strategy. This strategy calls for storing liquidity in the form of illiquid assets (T-bills, fed funds loans, CDs, etc.) and selling them when liquidity is needed b. Borrowed Liquidity or Liability Management Strategy. This strategy calls for the bank to purchase or borrow from the money market to cover all of its liquidity needs Balanced Liquidity Strategy. The C. use of liquid asset holdings (Asset Management) O d. No need to follow any strategy for liquidity management
According to the definition of a liquid financial firm, when should it have access to funds? At any time, regardless of the need for funds Precisely at the time the funds are needed When the funds are available at a low cost Only when the funds are urgently needed
In business finance the generally accepted corporate objective is: Group of answer choices maximization of market share. maximization of shareholders’ wealth maximization of capital employed. maximization of profit.
Which of the follwing is not correct about goals of finance function Select one: a. Improper utilisation of funds b. Acquiring Sufficient and Suitable Funds c. Maximising Firm’s Value d. Increasing Profitability
The house money effect is used to explain the tendency of investors to take higher risks when reinvesting profit earned than when they are investing their savings or initial capital Select one:TrueFalse
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