MGT201 Mid and Final Term Past Solved Paper
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@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
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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 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
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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 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
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Which of the following is NOT an example of hybrid equity
Select correct option:
Convertible Bonds
Convertible Debenture
Common shares
Preferred shares -
@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:
Which of the following is NOT an example of hybrid equity
Common shares
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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 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 onlyIII only
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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 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
1.51.0
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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 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.
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Which of the following is related to the use Lower financial leverage?
Select correct option:
Fixed costs
Variable costs
Debt financing
Common equity financing -
@zaasmi said in MGT201 Mid and Final Term Past Solved Paper:
Which of the following is related to the use Lower financial leverage?
Common equity financing
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The weighted average of possible returns, with the weights being the probabilities of occurrence is referred to as ________.
Select correct option:
Probability distribution
Expected return
Standard deviation
Coefficient of variation