ACCA Financial Management FM Exam Practice Questions 2023 - Part 8
1. ______________ such as restriction on business expansion, on raising additional capital, on declaration of dividend, nominee directors on the board, convertibility clause, etc.
A) Trading on equity
B) Security of assets
C) Restrictive covenants
D) Debt capacity of a business
2. ___________ refers the period between commencement of project construction and first commercial operation of the project.
A) Maturity period.
B) Initial period.
C) Gestation period
D) Growth period.
3. When capital market is booming, firms can take market route to ________.
A) Raise capital.
B) Decrease capital.
C) Stop growing.
D) Stagnate.
4. The long-run objective of financial management is to ___________.
A) Maximize earnings per share.
B) Maximize the value of the firm's common stock.
C) Maximize return on investment.
D) Maximize market share
5. Capital is allocated by financial markets by _______________.
A) A lottery system between investment dealers.
B) Pricing securities based on their risk and expected future cash flows
C) By pricing risky securities higher than low-risk securities.
D) By a government risk-rating system based on AAA for low risk and CCC for high risk.
A) Trading on equity
B) Security of assets
C) Restrictive covenants
D) Debt capacity of a business
2. ___________ refers the period between commencement of project construction and first commercial operation of the project.
A) Maturity period.
B) Initial period.
C) Gestation period
D) Growth period.
3. When capital market is booming, firms can take market route to ________.
A) Raise capital.
B) Decrease capital.
C) Stop growing.
D) Stagnate.
4. The long-run objective of financial management is to ___________.
A) Maximize earnings per share.
B) Maximize the value of the firm's common stock.
C) Maximize return on investment.
D) Maximize market share
5. Capital is allocated by financial markets by _______________.
A) A lottery system between investment dealers.
B) Pricing securities based on their risk and expected future cash flows
C) By pricing risky securities higher than low-risk securities.
D) By a government risk-rating system based on AAA for low risk and CCC for high risk.
1. Right Answer: C
Explanation:
2. Right Answer: C
Explanation:
3. Right Answer: A
Explanation:
4. Right Answer: A
Explanation:
5. Right Answer: B
Explanation:
Explanation:
2. Right Answer: C
Explanation:
3. Right Answer: A
Explanation:
4. Right Answer: A
Explanation:
5. Right Answer: B
Explanation:
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