JB....4040304305

1. 1Mog and Miller dividend irrelevancy proposition states that

   1. AIf no dividend is paid the share price will not rise
   2. BIf no dividend is paid the share price can rise if the company is profitable
   3. CDividend is not related to the share price
   4. DDividend is related to the share price if the growth is used in the model
2. 2Which of the following represents Mog and Miller's first proposition on capital structure

   1. AThe market value of the firm is independent of its capital structure
   2. BThe market value of a firm's debt is independent of its capital structure
   3. CThere is a negative relationship between gearing because of the tax shield
   4. DThe value of the firm is dependent on the capital structure
3. 3Ansoff's work suggests that competitive advantage is obtained through:

   1. ACost leadership
   2. BDifferentiation
   3. CNiche
   4. DAny of the above
4. 4Collins Holdings is having new office built at a cost of £45 million. It has a 10% retention policy and in the first month of the construction project 10% of the contract is completed. In the second month 15% of the contact is completed. Calculate the sum payable to the contractor in month two.

   1. A£6,782500
   2. B£6,685,000
   3. C£6,750,000
   4. DNone of the above
5. 5A new piece of machinery costs £50,000 to purchase outright and will have a residual value of £5,000 after three years. the cost of capital is 5%. In calculating the ARR for this investment, what would the average investment be?

   1. A£25,000
   2. B£22,500
   3. C£27,500
   4. D£25,500
6. 6A investor plans to save £1800 for 12 years for her retirement and expects to earn 6% per year on all her invested funds. What is the amount the investor will have accumulated at the end of 12 years is closest to the following:

   1. A£12,340
   2. B£20,684
   3. C£22,5850
   4. D£24,500
7. 7Wade LTD is considering a new capital project which has the following information: capital outlay £175,000 spent immediately. Cash flows year one to five respectively are £50,000, £50,000, £40,000, £40,000. At the end of the project the equipment will be resold for an estimated £15,000. The cost f the capital is 7%. Find the NPV

   1. A£15,230
   2. B£17,780
   3. C£14,820
   4. DNone of the above
8. 8Using Wad's figures in question7 calculate the payback

   1. A4 years
   2. B3.53 years
   3. C3.88 years
   4. DNone of the above
9. 9Which of the following is concerned with shareholder preferences

   1. AClientele effect
   2. BResidual Policy
   3. CAgency theory
   4. DBird in hand theory
10. 10Company X has a present value of £87 million and Company Y has a present value of £24 million. Merging the two would enable a cost of reduction of £6 million. Company X acquires 100% of shares in company Y for £27 million. What do company's shareholder gain from the acquisition?

    1. ANothing; All the gain goes to company X shareholders
    2. B£ 3 million
    3. C£6 million
    4. D£4.6 million

11. 11Calvert has a P/E ratio of 9.6 and a share price of 159 pence. What is the earnings per share of the company?

    1. A14.59 pence per share
    2. B15.83 pence per share
    3. C6.63 pence per share
    4. DThere is insufficient information to calculate this
12. 12What is the main strategic financial objective of a public limited company?

    1. ATo ensure that the employees are fully motivated
    2. BTo make a good profit
    3. CTo enhance the value of the company through strategic growth
    4. DTo maximise the dividend paid to the shareholders from profit after tax
13. 13A delayed perpetuity cash flow is

    1. AThe cash flow that is the same for a number of years
    2. BThe cash flow is the same from the beginning of the project until the end
    3. CThe cash flow starts part way through a project and runs for the foreseeable future
    4. DA cash flow that is received only once
14. 14The senior management of a company should treat risk in the same way as which of the following

    1. AShareholders
    2. BUK Government
    3. CThe Company Bank
    4. DThe Chairman
15. 15Research into risk and corporate failure using multi variable analysis at Brunel University made the following recommendation to Alman's model

    1. AEnhance the gearing ratio
    2. BMeasure the financial change between accounting years
    3. CAdd a cash flow ratio
    4. DChange the coefficients in the original formula
16. 16Which if any should be invested in if the current risk free return is 6 per cent and market risk premium 8 per cent? Using CAPM calculate which is the following investments is the most efficient.

    1. AInvestment B
    2. BInvestment C
    3. CInvestment D
    4. DInvestment E
17. 17Excel plc buys £ and sells $ for spot. The rate quoted by the bank is $1.6365/75. What rate would you buy the pound for and what is the spread of the rate

    1. A1.6375 and 10 points
    2. B1.6375 and 10 pips
    3. C1.6365 and 10 points
    4. D1.6365 and 10 pips
18. 18A UK manufacture purchases components from a US supplier at a cost of $10 million dollars. During the year the rate of £1 to the dollar has ranged from $1.50 to $1.70. Calculate the forex exposure

    1. A£416,666
    2. B£632,353
    3. C£784,313
    4. DNone of the above
19. 19Calculate the expected return using portfolio theory

    1. A4%
    2. B6%
    3. C5%
    4. DNone of the above
20. 20Using the data in question 19 calculate the risk using portfolio theory

    1. A9.45
    2. B9.56
    3. C9.86
    4. D1.5 Beta

Description

Quiz on JB....4040304305, created by Irtaza Hamid on 08/05/2019.

Author

Irtaza Hamid

Language

English

Views

0

Rating

No ratings yet

Rate this quiz

Rate this quiz

More on Investment Appraisal