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FIN – Finance

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Showing 7–9 of 10 questions

Question 7

Strategy is a course of action to achieve an objective. Corporate objectives are relevant for the organization as a whole, relating to key factors for business success. However, objectives can be in the form of financial objectives and non-financial objectives.

Which of the following is a financial objective of an organization?

Select an option, then click Submit answer.

  • ○

    Earnings per share growth
  • ○

    Welfare of employees
  • ○

    Provision of certain level of services
  • ○

    Welfare of society

Question 8

It has been claimed that the weighted average cost of capital (WACC) should only be used to evaluate investment decisions, involving discounted cash flow calculations, where:

1. The proposed project does not alter the business risk profile of the business.

2. The WACC reflects the long-term capital structure of the business.

Which ONE of the following combinations (true/false) is correct?

Select an option, then click Submit answer.

  • ○

    Statement 1 = True, Statement 2 = True
  • ○

    Statement 1 = True, Statement 2 = False
  • ○

    Statement 1 = False, Statement 2 = True
  • ○

    Statement 1 = False, Statement 2 = False
Question 9

Consider the following statements concerning the efficient market hypothesis:

1. When markets demonstrate semi-strong form efficiency, share prices will react to publicly-available information about the future prospects of a business.

2. When markets demonstrate weak form efficiency, there is no connection between past share price movements and future share price movements.

Which of the following combinations (true/false) is correct?

Select an option, then click Submit answer.

  • ○

    Statement 1 = True, Statement 2 = True
  • ○

    Statement 1 = True, Statement 2 = False
  • ○

    Statement 1 = False, Statement 2 = True
  • ○

    Statement 1 = False, Statement 2 = False