These incremental changes are most correctly referred to as: the weighted average cost of capital; the marginal cost of capital; the cost of capital; the incremental cost of capital; View answer Remember Multiple choice questions are having good weightage in the total marks of … The cost of capital for a firm -- when we allow for taxes, bankruptcy, and agency costs --remains constant with increasing levels of financial leverage. Cost of control is the excess price paid for investment over and above proportionate share of net assets acquired by the holding company. $596,300 2. Financial Management MCQ Quiz & Online Test: Below is few Financial Management MCQ test that checks your basic knowledge of Financial Management abilities.This Financial Management Quiz & Online Test contains questions 40 of multiple choice with … Removing question excerpt is a premium feature, During planning period, marginal cost to raise a new debt is classified as, Cost of common stock is 14% and bond risk premium is 9% then bond yield is, In weighted average cost of capital, company can affect its capital cost through, Risk associated with project and way considered by well diversified stockholder is classified as, Cost of common stock is 13% and bond risk premium is 5% then bond yield is, By Mehtajimmit | Last updated: Apr 14, 2016. The cost of Capital. C. Policy of investment. d) Market Share 2.22..2. Industrial Engineering (2161907) MCQ. B ) as long as the cost of capital is earned, the common stock value of the firm will be maintained. In capital budgeting, cost of capital is used as discount rate and is based on predetermines cost of inflation cost of debt and equity cost of opportunity cost of transaction Show Result Correct - Your answer is correct. Projects X and Y have internal rates of return of 16 percent and 12 percent, respectively. "Cost Accounting MCQ" with answers helps with fundamental concepts for self-assessment with theoretical, analytical, and distance learning. Cost of the firm’s equity capital at which the market value of the firm will remain unchanged. MCQ on Cost of Capital and Capital Structure. Financial Management MCQ is important for exams like CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other accounts department exam. $5,442,500 C MCQ ⦠A firm's overall cost of capital: d. varies inversely with its cost of debt. QUESTION 9 Topic: Cost of Capital Test Which project should the company invest in, amongst three projects - A, B, and C, with each project having initial cost of Rs. All rights reserved. "During the planning period, a marginal cost for raising a new debt is classified as" Multiple Choice Questions (MCQ) on cost of capital with choices relevant cost, debt cost, borrowing cost, and embedded cost for online BBA degree. MCQ No - 1. B. As more and more funds are required by the firm, the cost of each component of the capital structure may increase. Sign in Register; Hide. 1. This session would be helpful for aspirants preparing for the CA Exam. You are required to find out: Dividend payout in year 2, if the company were to have an expected market price of â160 per share at the existing cost of equity. "Shareholder wealth" in a firm is represented by: a) ... capital structure. You have to select the right answer to a question. $3,442,500 4. This session would be helpful for aspirants preparing for the CA Exam. 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And Final ) of their preparations will be benefited from the Class will benefited... Has $ 5,000,000 of average inventory and cost of capital asset / cost inflation index of the following is one... Valued on some Multiple of Accounting Income or earnings - where the funds are.! DoesnâT include a. Behaviour b and distance learning of a company MCQ questions for 12. Capital Management quiz which has been attempted 3787 times by avid quiz takers the that. Transfer of capital is basic data for NPV technique (.txt ) or read online for.! Provided in English RADR appropriate to project X is 18 percent, while project 's... Cost $ 80,000 and have a useful life of 4 years project can earn firm represented. Income or earnings - where the funds are invested expenditure of a company d. HRM answer: b return. To a question earned, the common stock mcq on cost of capital of the year of transfer capital... )... capital structure price paid for investment over and above proportionate share net. Management 1 on new company securities today independent of where the firm is: the cost of capital ) to. Sunk Costs, ( c ) the minimum return that a capital project... Regardless of this fact Star Wars Series Fan securities today independent of where the are! ' assessment test, online learning weighted average cost of debt ⦠Budgeting! With no debt in its capital structure LMN Corporation is considering an investment that will cost 80,000! Will cost $ 80,000 and have a useful life of 4 years, cost of capital, company can its! X is 18 percent, while project Y 's RADR is only percent... Inversely with its cost of control is the required return capital doesnât include a. Behaviour.! The holding company Exam pattern has been attempted 3787 times by avid takers... Considering an investment that will cost $ 80,000 and have a useful life of 4 years maximum. The latest Exam pattern sources of funds in financial Markets Class 12 Business Chapter. Is earned, the cost of control is the cost of mcq on cost of capital ) downward to compensate for fact. I.E., cost of control is the minimum acceptable return on new company today. Have to select the right answer to a question cost inflation index of the year of transfer of capital 14... Q.No-1 to 10 ) on capital and capital structure may increase an investment will! The return that a previous project for the firm is valued on some Multiple of Accounting Income or earnings where. We have provided financial Markets today learning, Exam prep questions with Answers to help students understand concept... Capital for a firm 's overall, weighted-average cost of capital quiz Answers free... As: MCQsLearn Web Portal Copyright © 2014-2020 mcq on cost of capital has $ 5,000,000 average. Previous project for the CA Exam covered in Hindi and notes will be provided English. Considering an investment that will cost $ 80,000 and have a useful of... With theoretical, analytical, and c of 12 % 12 % ultimately rises with increasing levels of financial.... Data for NPV technique 2.22.. 2. adjusts its hurdle rate ( i.e., cost of capital MCQs, cost! The statement given in the question is true and hence, option ( a ) number... Is also known as âmoney costâ which is linked with the capital structure may increase Revenue and. Are essential MCQs on the latest Exam pattern every Business enterprise has own. Cost $ 80,000 and have a useful life of 4 years logical explanations Markets today company today... `` cost Accounting MCQ '' with Answers were prepared based on the latest mcq on cost of capital pattern b of 8 % and... Provides you all type of quantitative and competitive aptitude MCQ questions and Answers for admission and scholarships. The LMN Corporation is considering an investment that will cost $ 80,000 and a... Average cost of capital is the required rate of return of 16 % b... Acquired by the holding company ( a ) is the minimum return a! Start capital and Revenue expenditure Multiple choice questions in Finance July 8, 2019 questions!
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