Tag: financial management

Quizzes (21) Questions (93)

Questions Related to financial management

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Dividends paid in the ordinary course of business are known as __________.

  1. cash dividends

  2. profit dividends

  3. stock dividends

  4. property dividends
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Dividends paid out of the regular profits generated in the ordinary course of business are referred to as profit dividends.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

The dividend policy affects __________.

  1. the financial structure of corporation

  2. the flow of funds, corporate liquidity and stock prices

  3. the investor satisfaction with the return on his investment

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Dividend policy is a multifaceted decision that impacts the firm's capital structure, its liquidity position, the market price of its stock, and the overall satisfaction of its investors.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Dividends paid from capital are known as ___________.

  1. profit dividends

  2. cash dividends

  3. liquidation dividends

  4. property dividends
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Liquidation dividends are distributions made to shareholders when a company is winding up its operations or liquidating its assets. These are paid out of capital rather than accumulated profits.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Dividend policy is a ________.

  1. managerial decision

  2. financing decision

  3. dividend decision

  4. subjective value
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Dividend policy refers to the policy that deals with the percentage of profit which are yield as dividend to the shareholders of a company which is a financial decision as it includes the finance of the company which can be retained in the company or given as dividend. 

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

When dividend out of stock premiums is to be declared __________.

  1. stockholders need not be informed

  2. stockholders need not be consulted about them

  3. stockholders must be informed and consulted about them

  4. Both (a) and (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Dividends paid out of share premium accounts are subject to specific legal and regulatory requirements, which typically mandate that shareholders be informed and consulted regarding the use of these capital reserves.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Which of the following is known as the melon?

  1. Cash dividend

  2. Stock dividend

  3. Scrip dividend

  4. Property dividend
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In financial jargon, a stock dividend is sometimes colloquially referred to as a melon, particularly when it represents a distribution of accumulated surplus to shareholders.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

When a dividend is paid at the usual rate, it is designated as a ________.

  1. regular dividend payment

  2. stable dividend policy

  3. extra dividend policy

  4. irregular dividend
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A regular dividend is a payment made by a company to its shareholders at a consistent, predictable rate, usually on a quarterly or annual basis.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Corporations encourage irregular dividend payments due to

  1. Unsuccessful operations

  2. Earnings are fluctuating

  3. Impossibility to pay dividend regularly

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Irregular dividend payments are often a consequence of unstable financial performance, where the company cannot guarantee a fixed payout due to fluctuating earnings or operational challenges.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Which of the following factors dominate the dividend policy?

  1. Ownership considerations

  2. Firm-oriented considerations

  3. Both (a) and (b)

  4. Legal considerations
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Dividend policy is primarily driven by internal factors related to the firm, such as liquidity, profitability, investment opportunities, and growth requirements, collectively known as firm-oriented considerations.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Which of the following dividend payments lead to a transfer of stock from a speculative class into an investment category?

  1. Regular dividend payments

  2. Stable dividend payments

  3. Irregular dividends

  4. Extra dividends
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Stable dividend payments signal financial health and reliability to the market, which helps attract long-term investors and shifts the perception of the stock from a speculative asset to a stable investment.