Financial Management

✅ The correct answer is A.
Present value of portfolio = Current value of portfolio – Current option price
= Rs. 50 – Rs. 20 = Rs. 30.

✅ The correct answer is A.
An estimation by marginal investor, a higher expected return is earned on more risky securities. The marginal investor in a firm is the investor who is most likely to be trading at the margin and therefore has the most influence on the pricing of its equity.

✅ The correct answer is A.
Net operating profit after tax = Free cash flow + Net investment in operating capital
= 15000 + 9000 = Rs. 24000.

✅ The correct answer is B.
The volume of sales is influenced by credit policy of a firm. Credit policy is an important part of the overall strategy of a firm to market its products. It refers to those decision variables that influence the amount of trade credit i.e investment in receivables.

✅ The correct answer is A.
Financial management is concerned with the acquisition, financing, and management of assets with some overall goal in mind. Financial Management is the application of general principles of management to the financial possessions of an enterprise.

✅ The correct answer is A.
Stocks which has high book for market ratio are considered as more risky.

✅ The correct answer is D.
Second mortgages pledged against bond’s security are referred as junior mortgages. A junior mortgage is a mortgage that is subordinate to a first or prior (senior) mortgage. A junior mortgage often refers to a second mortgage, but it could also be a third or fourth mortgage. In the case of foreclosure, the senior mortgage will be paid down first.

✅ The correct answer is D.
Capital gain expected by stockholders and dividends are included in cost of equity. The cost of equity is the return a company requires to decide if an investment meets capital return requirements.

✅ The correct answer is A.
Dividend per Share = Dividend Paid / Shares Outstanding
= 67600000 / 5500000 = Rs. 1.23

✅ The correct answer is B.
An analysis of decision making of investors and managers is classified as behavioral finance. Behavioral finance is the study of the influence of psychology on the behavior of investors or financial analysts. It also includes the subsequent effects on the markets.