MGT201 Mid and Final Term Past Solved Paper

[zaasmi]

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

In the dividend discount model, ________ which of the following are not incorporated into the discount rate?

Return on assets

[zaasmi]

Which of the following could NOT be defined as the capital structure of the Company?
Select correct option:

The firm’s mix of Assets and liabilities
The firm’s common stocks only
The firm’s debt-equity ratio
All of the given options

[zaasmi]

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

Which of the following could NOT be defined as the capital structure of the Company?

The firm’s common stocks only

[zaasmi]

An implicit cost of adding debt to the capital structure is that it:
Select correct option:

Adds interest expense to the operating statement
Increases the required return on equity
Reduces the expected return on assets
Decreases the firm’s beta

[zaasmi]

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

An implicit cost of adding debt to the capital structure is that it:

Increases the required return on equity

[zaasmi]

Why common stock of a company must provide a higher expected return than the debt of the same company?
Select correct option:

There is less demand for stock than for bonds
There is greater demand for stock than for bonds
There is more systematic risk involved for the common stock
There is a market premium required for bonds

[zaasmi]

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

Why common stock of a company must provide a higher expected return than the debt of the same company?

There is more systematic risk involved for the common stock

[zaasmi]

Which of the following is NOT an example of hybrid equity

Select correct option:
Convertible Bonds
Convertible Debenture
Common shares
Preferred shares

[zaasmi]

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

Which of the following is NOT an example of hybrid equity

Common shares

[zaasmi]

Which if the following is (are) true?
I. The dividend growth model holds if, at some point in time, the dividend growth rate exceeds the stock’s required return.
II. A decrease in the dividend growth rate will increase a stock’s market value, all else the same.
III. An increase in the required return on a stock will decrease its market value, all else the same.

Select correct option:
I, II, and III
I only
III only
II and III only

[zaasmi]

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

Which if the following is (are) true?
I. The dividend growth model holds if, at some point in time, the dividend growth rate exceeds the stock’s required return.
II. A decrease in the dividend growth rate will increase a stock’s market value, all else the same.
III. An increase in the required return on a stock will decrease its market value, all else the same.

Select correct option:
I, II, and III
I only
III only
II and III only

III only

[zaasmi]

If 2 stocks move in the same direction together then what will be the correlation coefficient?
Select correct option:
0
1.0
-1.0
1.5

[zaasmi]

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

If 2 stocks move in the same direction together then what will be the correlation coefficient?
Select correct option:
0
1.0
-1.0
1.5

1.0

[zaasmi]

Total portfolio risk is ________.

Select correct option:
Equal to systematic risk plus non-diversifiable risk
Equal to avoidable risk plus diversifiable risk
Equal to systematic risk plus unavoidable risk
Equal to systematic risk plus diversifiable risk

[zaasmi]

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

Total portfolio risk is ________.

Total portfolio risk is Equal to systematic risk plus diversifiable risk.

[zaasmi]

Which of the following is related to the use Lower financial leverage?

Select correct option:
Fixed costs
Variable costs
Debt financing
Common equity financing