Best Answer

Choose the correct option among the choices given below:

1. Who determine the market price of a share of common stock?

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

2. What should be the focal point of financial management in a firm?

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

3. Which of the following would generally have unlimited liability?

a. A limited partner in a partnership

b. A shareholder in a corporation

c. The owner of a sole proprietorship

d. A member in a limited liability company (LLC)

4. Which of the following is equal to the average tax rate?

a. Total tax liability divided by taxable income

b. Rate that will be paid on the next dollar of taxable income

c. Median marginal tax rate

d. Percentage increase in taxable income from the previous period

5. Felton Farm Supplies, Inc., has 8 % return on total assets of Rs.300,000 and a net

profit margin of 5 %. What are its sales?

a. Rs. 3, 750,000

b. Rs. 480, 000

c. Rs. 300, 000

d. Rs. 1, 500,000

Financial Management Quiz 1

Spring Semester 2009

6. Which of the following would not improve the current ratio?

a. Borrowing on short term to finance additional fixed assets

b. Issue long-term debt to buy inventory

c. Sell common stock to reduce current liabilities

d. Sell fixed assets to reduce Accounts Payable

7. With continuous compounding at 8% for 20 years, what is the approximate future

value of a Rs.20,000 initial investment?

a. Rs. 52,000

b. Rs .93,219

c. Rs. 99,061

d. Rs. 915,240

8. In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly

decrease, the present value of that future amount to you would __________.

a. Fall

b. Rise

c. Remain unchanged

d. Incomplete information

9. Cash budgets are prepared from past:

a. Balance sheets

b. Income statements

c. Income tax and depreciation data

d. None of the given options

Financial Management Quiz 1

Spring Semester 2009

10. Which of the following is part of an examination of the sources and uses of


a. A forecasting technique

b. A funds flow analysis

c. A ratio analysis

d. Calculations for preparing the balance sheet

11. An annuity due is always worth _____ a comparable annuity.

a. Less than

b. More than

c. Equal to

d. Cannot be found

12. As interest rates go up, the present value of a stream of fixed cash flows _____.

a. Goes down

b. Goes up

c. Stays the same

d. Cannot be found

13. ABC Company is expected to generate Rs.125 million per year over the next three

years in free cash flow. Assuming a discount rate of 10%, what is the present

value of that cash flow stream?

a. Rs. 375 million

b. Rs. 338 million

c. Rs. 311 million

d. Rs. 211 million

14. If we were to increase ABC company' cost of equity assumption, what would we

expect to happen to the present value of all future cash flows?

a. An increase

b. A decrease

c. No change

d. Incomplete information

Financial Management Quiz 1

Spring Semester 2009

15. In proper capital budgeting analysis we evaluate incremental __________ cash


a. Accounting

b. Operating

c. Before-tax

d. Financing

16. A capital budgeting technique through which discount rate equates the present

value of the future net cash flows from an investment project with the project's

initial cash outflow is known as:

a. Payback period

b. Internal rate of return

c. Net present value

d. Profitability index

17. Discounted cash flow methods provide a more objective basis for evaluating and

selecting an investment project. These methods take into account:

a. Magnitude of expected cash flows

b. Timing of expected cash flows

c. Both timing and magnitude of cash flows

d. None of the given options

18. Which of the followings make the calculation of NPV difficult?

a. Estimated cash flows

b. Discount rate

c. Anticipated life of the business

d. All of the given options

19. From which of the following category would be the cash flow received from sales

revenue and other income during the life of the project?

a. Financing activity

b. Operating activity

c. Investing activity

d. All of the given options

Financial Management Quiz 1

Spring Semester 2009

20. Which of the following technique would be used for a project that has non -

normal cash flows?

a. Multiple internal rate of return

b. Modified internal arte of return

c. Net present value

d. Internal rate of return

User Avatar

Wiki User

โˆ™ 2009-12-08 19:16:15
This answer is:
User Avatar
Study guides


20 cards

What does someone using fundamentals analysis look at when analyzing a particular stock

What describes what is done with foreign currency in the currency exchange market

The optimal use of a resource takes place when what happens

What best explains what happens when a currency is pegged to the us dollar

See all cards
7 Reviews

Add your answer:

Earn +20 pts
Q: Who determine the market price of a share of common stock?
Write your answer...
Still have questions?
magnify glass
Related questions

Market price per share of common stock?

Market price per share of common stock is a calculated metric used to determine if the price of a stock is a good buy. The market price per share is calculated by taking the net income of a company and subtracting the preferred dividends and number of common shares outstanding.

An increase in the market price of a company's common stock will immediately affect its?

earnings per share

When calculating the cost of capital how should the share premium be calculated?

share premium could be calculated as by getting the difference between the market price of the share and its nominal price. Formula: Share Premium= Market Price - Nominal Price

Definition of market value per share?

Market value per share can be defined as the price at which stocks are bought or sold. The market value per share is the current price of the stock.

Market value per share or stock price?

Market value should beTotal # of Shares outstanding X Share price

How do you calculate market value of a company?

Market Value of a company = No. of outstanding shares * Market price per share Assuming there are 100,000,000 share of XYZ limited and its price per share is $25, the market value of the XYZ limited is $ 2,500,000,000/-

Market price of a share of stock is determined how?

Market price is the price at which a buyer is willing to buy and a seller is willing to sell.

Highest share price in Indian market?


What is LTP in share market?

Last Traded Price.

Stockholders equity is 3.75 billion and price earnings ratio is 3.5 common shares outstanding are 50 million and market book ratio is 1.9 what is the price of a share of common stock?


What is market price per share divided by book value per share?

market/book ratio (M/B)

Who regulate the petrol price?

the share holders in the stock market

People also asked