Business Finance MCQs with Answer
Business finance, the raising, and managing of funds by business organizations. Planning, analysis and control operations are the responsibilities of the financial manager, who is usually close to the top of organizational structure of a firm. You can download the Business Finance MCQs with Answer in PDF format using the link given below.
There are two main types of business finance, debt finance, and equity finance. Broadly speaking, debt financing is funds borrowed from a lender and repaid with interest, and equity financing is capital exchanged for part-ownership / shares in a company.
Business Finance MCQs with Answer Download
1. “Shareholder wealth” in a firm is represented by:
a) the number of people employed in the firm.
b) the book value of the firm’s assets less the book value of its liabilities
c) the amount of salary paid to its employees.
d) the market price per share of the firm’s common stock.
2. The long-run objective of financial management is to:
a) maximize earnings per share.
b) maximize the value of the firm’s common stock.
c) maximize return on investment.
d) maximize market share.
3. What are the earnings per share (EPS) for a company that earned Rs. 100,000 last year in after-tax profits, has 200,000 common shares outstanding and Rs. 1.2 million in retained earning at the year end?
a) Rs. 100,000
b) Rs. 6.00
c) Rs. 0.50
d) Rs. 6.50
4. A(n) would be an example of a principal, while a(n) would be an example of an agent.
a) shareholder; manager
b) manager; owner
c) accountant; bondholder
d) shareholder; bondholder
5. The market price of a share of common stock is determined by:
a) the board of directors of the firm.
b) the stock exchange on which the stock is listed.
c) the president of the company.
d) individuals buying and selling the stock.
6. The focal point of financial management in a firm is:
a) the number and types of products or services provided by the firm.
b) the minimization of the amount of taxes paid by the firm.
c) the creation of value for shareholders.
d) the dollars profits earned by the firm.
7. ___________________ of a firm refers to the composition of its long-term funds and its capital structure.
a) Capitalisation
b) Over-capitalisation
c) Under-capitalisation
d) Market capitalization
8. In the _______________, the future value of all cash inflow at the end of time horizon at a particular rate of interest is calculated.
a) Risk-free rate
b) Compounding technique
c) Discounting technique
d) Risk Premium
9. ______________ is the price at which the bond is traded in the stock exchange.
a) Redemption value
b) Face value
c) Market value
d) Maturity value
10. _____________ enhance the market value of shares and therefore equity capital is not free of cost.
a) Face value
b) Dividends
c) Redemption value
d) Book value
You can download the Business Finance MCQs with Answer in PDF format using the link given below.