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Corporate Financial Management

Business

Quiz 21 :

Derivatives

Quiz 21 :

Derivatives

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Which of the following most accurately describes operating gearing?
Free
Multiple Choice
Answer:

Answer:

C

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What will shareholders do if they see a firm taking on increasing debt levels?
Free
Multiple Choice
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Answer:

B

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How is an increased gearing level likely to be viewed by the financial markets?
Free
Multiple Choice
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Answer:

B

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What is the primary effect of financial gearing?
Multiple Choice
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Which of the following examples of signaling is most likely to be used by managers?
Multiple Choice
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Which two of the following are correct, in a world with tax but no distress costs, when the capital of a company is almost entirely made up of debt?
Multiple Choice
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Which of the following does not accurately apply to the various types of capital gearing?
Multiple Choice
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Which expression would be most useful when calculating the value of the firm in a World without growth?
Multiple Choice
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Which two of the following best relate to business risk and financial risk?
Multiple Choice
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Which of the following correctly relates to levels of gearing, financial distress, and the cost of capital?
Multiple Choice
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What is a company said to have if it has cash and/or more spare debt capacity?
Multiple Choice
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Which of the following most accurately defines what is meant by 'agency costs' in finance theory?
Multiple Choice
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Which of the following most accurately describes income gearing?
Multiple Choice
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Which of the following most accurately describes capital gearing?
Multiple Choice
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Which two terms best fit the blanks in the following statement: "When compared with equity finance, debt finance is and for the company."?
Multiple Choice
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Which three of the following apply to interest cover?
Multiple Choice
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How does financial gearing affect the extent to which shareholders' returns vary as a result of changes in a firm's income?
Multiple Choice
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Which two of the following best describe the effect of a fall in profit, assuming there is no change in interest charges?
Multiple Choice
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Which three of the following are reasons why financing a business through borrowing is cheaper than using equity?
Multiple Choice
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For the financial manager who cannot decide on a suitable level of gearing, which of the following is the best guideline?
Multiple Choice
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