Financial Management Learning App | Cost of Capital MCQs e-Book PDF
Financial Management MCQs (BBA Finance) From Textbook

Financial Management Competitive Exam MCQs – Practice Test 5 (Chapter 5)

Cost of Capital MCQs with Answers PDF Download – Test 5

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Cost of Capital MCQs – Practice Test 5 PDF Download

MCQ 21: For each component of capital, a required rate of return is considered as:

  1. component cost
  2. evaluating cost
  3. asset cost
  4. asset depreciation value

MCQ 22: If the payout ratio is 0.45 then the retention ratio will be:

  1. 0.55
  2. 1.45
  3. 1.82
  4. 0.45

MCQ 23: The stock selling price is $35, expected dividend is $5 and expected growth rate is 8% then cost of common stock would be:

  1. 40
  2. 0.2229
  3. 0.1428
  4. 80

MCQ 24: The retention ratio is 0.55 and the return on equity is 12.5% then the growth retention model would be:

  1. 0.1195
  2. 0.06875
  3. 0.1305
  4. 0.2272

MCQ 25: The preferred dividend is divided by preferred stock price multiply by (1-floatation cost) is used to calculate:

  1. transaction cost of preferred stock
  2. financing of preferred stock
  3. weighted cost of capital
  4. component cost of preferred stock

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