Financial Management

Financial Management MCQs with Answers and Explanations | Corporate Finance & Investment Objective Questions

Master the core concepts of Financial Management with our comprehensive set of MCQs with answers and detailed explanations. Covering topics such as time value of money, capital budgeting, cost of capital, working capital management, capital structure, dividend policy, risk and return, portfolio management, and financial planning, these questions are ideal for students, teachers, and candidates preparing for professional and competitive exams (CA, ACCA, ICMA, CFA, MBA, BBA, CSS, PMS, NTS, FPSC, PPSC, UPSC, etc.). Each MCQ is followed by a clear explanation to build strong concepts, sharpen decision-making skills, and enhance exam readiness. Perfect for practice, revision, and self-assessment in the field of Financial Management and Corporate Finance.

61. First step in calculating value of stock with non-constant growth rate is to

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estimate expected dividend
actual expected dividend
estimate number of share
estimate intrinsic shares
✅ The correct answer is A.
First step in calculating value of stock with non-constant growth rate is to estimate expected dividend. Dividend yield refers to a stock’s annual dividend payments to shareholders, expressed as a percentage of the stock’s current price.

63. Banks such as Bank of America serves a range of savers and borrowers are classified as

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transfer banks
commercial banks
serving banks
nation’s banks
✅ The correct answer is B.
Banks such as Bank of America serves a range of savers and borrowers are classified as commercial banks. Commercial banks make money by providing loans and earning interest income from those loans.

66. Formula Sales revenue minus operating cost and taxes minus operating capital investments is used to calculate

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available income
cash income
free cash flows
free distribution
✅ The correct answer is C.
Formula Sales revenue minus operating cost and taxes minus operating capital investments is used to calculate free cash flows. Free cash flow is the cash a company produces through its operations, less the cost of expenditures on assets.

69. The amount of current assets that varies with seasonal requirements is referred to as __________ working capital.

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Permanent
Net
Temporary
Gross
✅ The correct answer is C.
The amount of current assets that varies with seasonal requirements is referred to as Temporary working capital. Temporary working capital (TWC) is the temporary fluctuation of networking capital over and above the permanent working capital.

70. In BSE shares are divided into_______________.

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two categories
three categories
four categories
five categories
✅ The correct answer is B.
In BSE shares are divided into three categories. Primarily the stocks that are listed in the National Stock Exchange are divided into three different categories on the basis of the market capitalization – large cap, mid cap and the small cap.