When does the earnings per share (EPS) rise with higher debt?

  1. Home
  2. Back

Business Studies - Online Exam Test Papers | Business Studies - MCQs[multiple choice questions and answers ] | Business Studies - Mock Test Papers | Business Studies - Practice Papers | Business Studies - Sample Test Papers |

Question:
When does the earnings per share (EPS) rise with higher debt?

1.When the rate of return on investment is higher than the rate of interest.

2.When the rate of return on investment is lower than the rate of interest.

3.When the rate of interest is more than the rate of return.

4.None of the above.

Posted Date:-2021-02-22 08:13:15

More MCQS Questions and answers

  1. A company is likely to declare higher dividends if
  2. A company must adhere to the provisions of the Companies Act while taking the dividend decision. Identify the related factor of dividend decision being mentioned in the above line.
  3. A higher financial leverage ratio indicates that
  4. Amber Limited has been experiencing a downfall in its popularity; due to growing competition. Also the company doesn’t see any forthcoming viable business expansion opportunities in the near future. So the management of the company has decided to declare high dividends for the current financial year. Identify the factor related to dividend decision being described above.
  5. Arrange the following steps involved in the process of financial planning in the correct sequence.
  6. As the financial leverage of a company increases; it leads to
  7.  The total capital of Uranium Private Limited is ?50 lacs. The amount of debt is ?20 lacs. The company has earned a profit of ^10 lacs during the current financial year. Its return on investment (ROI) for the present year is
  8.  The working capital requirement of a business is not likely to be high when?
  9.  Under which of the following situations a company should not issue debt capital?
  10. Dev has two projects A and B in hand. The same amount of risk is involved in both the projects. If the rate of return of project A and B is 20% and 15% respectively; then under normal circumstance; which of the two projects is likely to be selected?
  11. Financial Management aims at
  12. Gamble Limited is a company dealing in healthcare products. The company is earning high profits but is short on cash; so it has decided to declare less dividends in the current financial year. Identify the factor related to dividend decision being described in the above lines.
  13. If a company is borrowing funds @ 10% and the tax rate is 30%; the after-tax cost of debt is only
  14. If in a particular situation; the earnings per share (EPS) falls with the increased use of debt; it indicates that
  15. If the rate of return on investment for a company is 16%; a situation of unfavourable financial leverage will be said to arise when the rate of interest payable on debt capital is
  16. In order to raise an additional capital of ?50 lacs; Yudhister Limited has used debt because
  17. It is essentially the preparation of a financial blueprint of an organisation’s future operations. Identify the related concept.
  18. Business finance is needed to
  19. Kapil Limited is a company dealing in ready-to-eat food products. Over the years; the earning potential of the company has gone up and it enjoys a good reputation. The Financial Manager is confident of the fact that not just the earnings of the current year; but of our future years are likely to be high. Identify the related factor of dividend decision being described in the given lines.
  20. Lalit; an experienced stock broker advised his client Prabhu to invest in the shares of Blue Angel Limited; as the company has declared high dividends since an increase in dividend is perceived as a good news and stock prices react positively to it. Identify the related factor of dividend decision being described in the above lines.
  21. Name the decision which affects both the profitability and the financial risk.
  22. Name the financial decision which relates to disposal of profits.
  23. Name the process that enables the management to foresee the fund requirements; both the quantum as well as the timing.
  24. Primary aim of financial management is to
  25. Purchasing a new machine to replace an existing one is an example of
  26. The financial plans are drawn by taking into consideration
  27. The inability of a business to meet its fixed financial obligations; like payment of interest; is known as
  28. The overall financial risk depends upon the
  29. The short-term financial plans are known as
  30. The size of assets; the profitability and competitiveness are all affected by
  31. The working capital requirement of a business is not likely to be low when
  32. These decisions affect the liquidity as well as profitability of a business.
  33. This decision determines the overall cost of capital and the financial risk of the enterprise.
  34. This decision is about the quantum of finance to be raised from various long-term sources.
  35. This decision relates to how the firm’s funds are invested in different assets;
  36. Under which of the following circumstances a company is not likely to declare a higher dividend?
  37. Under which of the following circumstances the fixed capital requirement of a business is not likely to be high?
  38. Under which of the following conditions the fixed capital requirements of a business is not likely to below?
  39. Under which of the following situations a company is not likely to issue equity capital?
  40. When does the earnings per share (EPS) rise with higher debt?
  41. When the stock market index is rising; a company may issue in order to meet its financial requirements.
  42. When the stock market is bearish; a company may depend upon in order to raise the required funds.
  43. Which of the following is not a part of owners’ funds?
  44. Which of the following is not a source of borrowed funds?
  45. Which of the following is not a tangible asset?
  46. Which of the following is not an importance of financial planning?
  47. Which of the following is not an objective of financial planning?
  48. Which of the following sources of capital should not be selected by a business if its fixed cost is high?
  49. Which of the following statements is not true with regard to use of fixed capital?
  50. Which of the following statements is not true?
  51. Which of the following statements is not true?
  52. While taking a loan from a financial institution; Lokesh Enterprises signed an agreement that they shall not pay dividend to its shareholder more than 15% until the loan is repaid; or dividend shall not be declared if the liquidity ratio is found to be less than 1:1. Identify the factor related to dividend decision being described in the above case.
Search
R4R Team
R4Rin Top Tutorials are Core Java,Hibernate ,Spring,Sturts.The content on R4R.in website is done by expert team not only with the help of books but along with the strong professional knowledge in all context like coding,designing, marketing,etc!