Question55:-According to Walter Model, when the return on investment is more than the cost of equity capital, in order to
maximize the value of firm
A:-100% dividend pay out
B:-50% dividend pay out
C:-Not to pay dividend
D:-Pay any dividend
Correct Answer:- Option-C
Question56:-Unlevering of beta means
A:-Calculation of equity beta
B:-Calculation of debt beta
C:-Calculation of modified beta
D:-Calculation of firms beta’ *
Correct Answer:- Option-D
Question57:-Trading on equity is a situation where
A:-ROI is more than cost of debt
B:-ROI is less than cost of debt
C:-ROI is equal to cost of debt
D:-ROI is not related to cost of debt
Correct Answer:- Option-A
Question58:-In Certainty Equivalents approach in order to incorporate the risk, adjustment made on
A:-Profit
B:-Discount rate
C:-Cash flow
D:-Probability
Correct Answer:- Option-C
Question59:-A company is expected to pay a dividend of Rs. 10 per share next year. The dividends are expected to grow
perpetually at a rate of 10%. What is the value of its share if the required rate of return is 15% ?
A:-67
B:-150
C:-100
D:-200
Correct Answer:- Option-D
Question60:-Deposit multiplier for a bank with** 'p' as initial deposit and 'r' as the cash reserve ratio is
Av-p Xr
B:-p/r
C:-p(1 +r)
D:-p/(1 — r)
Correct Answer:- Option-B
Question61:-A banking company cannot hold any immovable property not acquired for its own use for a period exceeding
A:-12 years
B:-10 years
C:-7 years
D:-5 years
Correct Answer:- Option-C
Question62:-Which of the following is a liability of a bank ?
A:-Money at call
B:-Treasury bills
C:-Commercial paper
D:-Certificate of deposit
Correct Answer:- Option-D
Question63:-The rules framed in the Claytons case relates to Banker's
A:-Right of appropriation
B:-Right of general lien
C:-Right of set off
D:-Right to charge incidental charges
Correct Answer:- Option-A
Question64:-The Reserve Bank of India was established on
A:-1 January 1935
B:-1 April 1935