Corporate Finance MCQ Multiple Choice Questions Answers - Page 3 for Practice

Correct Answer is: The weighted average rate of return a company must earn on its investments

Correct Answer is: The profit from the sale of an asset

Correct Answer is: A ratio that compares a company's current assets to its current liabilities

Correct Answer is: There are no taxes or bankruptcy costs in an efficient market

Correct Answer is: It provides equity financing for early-stage, high-risk companies

Correct Answer is: The minimum return required to satisfy all of a company's investors

Correct Answer is: The company's past performance and financial health

Correct Answer is: It is a form of debt used by corporations

Correct Answer is: A bond with a convertible feature

Correct Answer is: The profit available to shareholders divided by the number of shares

Correct Answer is: Internal rate of return (IRR)

Correct Answer is: Total debt / Total equity

Correct Answer is: The use of debt to increase the potential return on equity

Correct Answer is: A fixed dividend payout

Correct Answer is: The market price of a company’s stock with its earnings per share

Correct Answer is: The rate of return a project must exceed for it to be accepted

Correct Answer is: The income reported on a company’s income statement

Correct Answer is: Financial options give investors the right to buy stocks, while real options relate to corporate investment decisions

Correct Answer is: Earnings Per Share (EPS) ratio

Correct Answer is: Salaries and wages of employees

Correct Answer is: To balance the cost of equity and debt

Correct Answer is: Determining the profitability of a firm after paying the cost of capital

Correct Answer is: A bond that can be redeemed by the issuer before its maturity date

Correct Answer is: Common stock is more volatile than preferred stock

Correct Answer is: A method of estimating a company's value by considering its expected dividends

Correct Answer is: The tax on profits from the sale of an asset

Correct Answer is: Rising stock prices

Correct Answer is: Return on assets (ROA)

Correct Answer is: Total revenue minus total costs, including opportunity costs

Correct Answer is: Balance Sheet