MGT201 Mid and Final Term Past Solved Paper

[zaasmi]

Nominal Interest Rate is also known as:
Select correct option:
Effective interest Rate
Annual percentage rate
Periodic interest rate
Required interest rate

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

Nominal Interest Rate is also known as:

Annual percentage rate

[zaasmi]

When taxes are considered, the value of a levered firm equals the value of the________.
Select correct option:
Unlevered firm
Unlevered firm plus the value of the debt
Unlevered firm plus the present value of the tax shield
Unlevered firm plus the value of the debt plus the value of the tax shield

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

When taxes are considered, the value of a levered firm equals the value of the Unlevered firm plus the present value of the tax shield> .

Unlevered firm plus the present value of the tax shield

[zaasmi]

The __________ the coefficient of variation ________ the relative risk of the investment.
Select correct option:
Larger; Larger
Larger; Smaller
Smaller; Larger
Smaller; Smaller

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

The Larger the coefficient of variation Larger the relative risk of the investment.

[zaasmi]

Which of the following is correct regarding the opportunity cost of capital for a project?
Select correct option:

The opportunity cost of capital is the return that investors give up by investing in the project rather than in securities of equivalent risk.

Financial managers use the capital asset pricing model to estimate the opportunity cost of capital

The company cost of capital is the expected rate of return demanded by investors in a company

All of the given options

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

Which of the following is correct regarding the opportunity cost of capital for a project?

All of the given options

[zaasmi]

For which of the following costs is it generally necessary to apply a tax adjustment to a yield measure?
Select correct option:
Cost of debt
Cost of preferred stock
Cost of common equity
Cost of retained earnings

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

For which of the following costs is it generally necessary to apply a tax adjustment to a yield measure?

Cost of debt

[zaasmi]

What is difference between shares and bonds?
Select correct option:
Bonds are representing ownership whereas shares are not
Shares are representing ownership whereas bonds are not
Shares and bonds both represent equity
Shares and bond both represent liabilities

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

What is difference between shares and bonds?

Shares are representing ownership whereas bonds are not

[zaasmi]

Which of the followings expressed the proposition that the cost of equity is a positive linear function of capital structure?
Select correct option:
The Capital Asset Pricing Model M&M Proposition I
M&M Proposition II
The Law of One Price

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

Which of the followings expressed the proposition that the cost of equity is a positive linear function of capital structure?

M&M Proposition II

[zaasmi]

The current yield on a bond is equal to ________.
Select correct option:
Annual interest divided by the current market price
The yield to maturity
Annual interest divided by the par value
The internal rate of return

[zaasmi]

@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:

The current yield on a bond is equal to ________.

Annual interest divided by the current market price