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Published on: 29/08/2019
Financial Management
Download CBSE Class 12th Standard CBSE Business Studies question papers, sample papers, important questions, and previous year solved papers in PDF format. Get free study materials, NCERT solutions, and exam preparation resources for Class 12th Standard CBSE Business Studies
Questions + Answers key
Take MCQ Business Studies Test
1.
When is a capital structure said to be optimum?
2.
What is ‘stock dividend’? How does it affect a company?
3.
“Ploughing back of profits holds the key to success of a business enterprises”. Do you agree. Give two reasons.
4.
State the foremost objective of financial management.
5.
How is the overall financial health of a business determined?
6.
What is business finance?
7.
What is the primary objective of 'financial management'?Or State the objective of Financial Management.
8.
Define financial management
9.
When is the dividend decision treated as a residual decision?
1.
( )
A capital structure is said to be optimum when the proportion of debt and equity is such that it results in an increase in the value of the shares.
2.
( )
When a co. instead of paying dividend in cash issues shares to its shareholders it is known as bonus shares or stock dividend. The effect of issuing bonus shares is that it increases the capital base of the Co.
3.
( )
Yes, agree.
This is because (i) the company need not raise finance from other sources hence cost of financing of the Co. is kept at minimum.
ii) When retained earnings are ploughed back business this greatly enhances prestige of Co. in the eyes of shareholder and the general public
4.
( )
The foremost objective of financial management is “maximization of share holder’s wealth
5.
( )
Financial health of a business is determined by the quality of its financial management.
6.
( )
Business finance is money required for carrying out business activities.
7.
( )
The primary objective of financial management is to maximise shareholder's wealth which is also known as wealth maximisation concept.
8.
( )
According to Weston and Brighan, "Financial management is an area of financial decision-making harmonising individual motives and enterprise's goals".
9.
A company's net earnings are divided into two parts, i.e.,-rctained earnings and dividends. Ifthe company has profitable investment opportunities, it would like to retain the earnings and reinvest rather than distribute them as dividends. To finance investment projects, the company has two alternatives either to raise external equity or to internally finance from the retained earnings available. Retained earnings are preferred as a source as they do not involve floatation costs and legal formalities. Thus, the company will pay dividends only when it cannot profitably reinvest the earnings. In this case, the dividend decision is treated as a residual or passive decision.
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CBSE 12th Standard CBSE Subjects
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