Variable cost in an organization ____________.
- be flexible according to the rate of interest.
- be fixed according to the rate of growth.
- remains constant. .
- does not change with volume of production.
Financial leverage is also known as ____________.
- Interest on debt
- Interest on equity .
- Trading on debt .
- Trading on equity
Nominal rate is the rate compounded ____________.
- One time in 2 years
- More than once in an year
- More than two years .
- Twice in 2 years
Corporation is not a part of ____________finance .
- Public
- Organization.
- Private
- Public & private
Cost of capital is the _____ rate of return expected by its investors
- higher.
- maximum.
- equal.
- minimum
Finance function is one of the most important functions of ____________.
- debt .
- business
- financial.
- marketing .
A firm will have favorable leverage if its _____ are more than the debt cost
- interest.
- debt
- equity.
- earnings.
Effective cost of debentures is ____________as compared to shares
- medium
- lower
- equal
- higher
Shares having no face value are known as ____.
- equal stock.
- debt equity stock.
- at par stock
- no par stock.
Financial leverage measures ____________.
- no change with EBIT and EPS.
- 1% variation in the level of production
- no change with EBIT and EPS.
- sensitivity of EPS with respect to 1% change in level of EBIT.
____________management is the important task of the finance manager.
- Profit .
- Debt
- Cash
- Equity
Fixed cost per unit ____________.
- does not change with volume of production.
- be flexible according to the rate of interest.
- changes according to volume of production
- remains constant. .
Operating leverage = ______.
- contribution less sales.
- contribution less profit.
- contribution less operating profit.
- contribution less total expenses
According to the traditional approach cost of capital affected by _____.
- debt-interest mix
- debt-capital mix
- equity expenses mix.
- debt-equity mix.
Variable cost per unit ____________.
- remains constant irrespective of the level of output.
- does not change with volume of production
- varies with the level of output.
- changes with the growth of the firm.
Operating leverage x financial leverage= _____.
- financial composite leverage.
- fixed leverage
- operating composite leverage.
- composite leverage.
A fixed rate of ____________is payable on debentures
- dividend
- brokerage
- commission
- interest
Ownership securities are represented by ____________.
- securities .
- debt
- equities
- debentures .
Financial leverage helps one to estimate ____________.
- both risks
- the financial risk.
- the business risk
- production risk.
Operating leverage measures ____________.
- production risk.
- financial risk.
- the business risk.
- both risks.
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