Financial Management MCQ on Equity Valuation
Financial Management MCQ on Equity Valuation
1. The shares of well-established, financially strong and big companies having remarkable
Record of dividends and earnings are known as:
(a) Growth shares
(b) Blue chip shares
(c) Income shares
(d) Cyclical shares
Ans- (b) Blue chip shares
2. The shares of the companies having high dividend payout ratios are:
(a) Income shares
(b) Cyclical shares
(c) Growth shares
(d) Defensive shares
Ans-(a) Income shares
3. The smallest unit of capital is known as:
(a) Debenture
(b) Share
(c) Bond
(d) Deposit
Ans-(b) Share
4. The valuation of equity by the discounted cash flow techniques depends on:
(a) Expected dividends
(b) Cash flows
(c) Earnings
(d) All of these
Ans-(d) All of these
5. The Market of initial public offerings where any new share is issued known as:
(a) Secondary market
(b) Money market
(c) Primary market
(d) None of these
Ans- (c) Primary market
6. The techniques used by fundamental analysts to valuate the equity shares is/are:
(a) Asset based techniques
(b) Comparable techniques
(c) Present value techniques
(d)All of these
Ans-(d)All of these
7. The model that assumes the normal rate of growth over an indefinite time horizon is assumed is:
(a) H model of equity valuation
(b) Gordon Model
(c) Free cash flow models
(d) None of these
Ans- (b) Gordon Model
8. Which models generally applied by the fundamental analysts to valuate the equity share are:
(a) Relative valuation models
(b) Dividend valuation models
(c) Both of these
(d) None of these
Ans- (c) Both of these
9. The balance sheet valuation is a:
(a) Nominal approach
(b) Futuristic approach
(c) Historical approach.
(d) None of these
Ans-(c) Historical approach
10. The discounted cash flow is which of the following approach?
(a) Backward approach
(b) Forward approach
(c) Earnings approach
(d) Risk approach
Ans-(b) Forward approach
11. The model that derive the value of stock from the pricing of comparable assets is called
as-
(a) Composite valuation model
(b) Relative valuation model
(c) Growth valuation model
(d) All of these
Ans-(b) Relative valuation model
12. The current dividends are assumed to be equal to future dividends in case of:
(a) Variable growth
(b) Perpetuity
(c) Constant growth
(d) None of these
Ans- (b) Perpetuity
13. The comparison of various facets of the same firm over a period of time is called as
(a) Cross sectional analysis
(b) Technical analysis
(c) Time series analysis
(d) None of these
Ans-(c) Time series analysis
14. The constant divided growth model is propounded by which of the following?
(a) Fama
(b) William Sharpe
(c) Gordon
(d) Miller
Ans-(a) Fama
Also Read Financial Management MCQ
