BUSINESS STUDIES CLASS 12
Master Your Business Finance Knowledge
Welcome to the Business Studies Class 12 Quiz! This engaging quiz is designed to test your knowledge of key concepts in financial management, capital structure, and dividend decisions.
- 21 thought-provoking multiple choice questions
- Designed for students and enthusiasts of business studies
- Instant feedback on your answers
Business finance is needed to
All of the above
Establish a business
Run a business
Expand a business
Which of the following is not a tangible asset?
Machinery
Trademarks
Factories
Offices
Financial Management aims at
Reducing the cost of funds procured
All of the above
Keeping the risk under control
Achieving effective deployment of such funds
Primary aim of financial management is to
Maximise shareholder’s wealth
Wealth maximisation concept
Maximisation of the market value of equity shares
All of the above
This decision relates to how the firm’s funds are invested in different assets,
Investment decision
Financing decision
Working capital decision
Dividend decision
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?
Project A
Project B
Both
None of the above
The inability of a business to meet its fixed financial obligations, like payment of interest, is known as
Business risk
Financial risk
Long-term risk
Market risk
Which of the following sources of capital should not be selected by a business if its fixed cost is high?
Equity shares
Preference shares
Debentures
All of the above
When the stock market index is rising, a company may issue in order to meet its financial requirements.
Debenture
Bonds
Equity shares
None of the above
When the stock market is bearish, a company may depend upon in order to raise the required funds
Debentures
Equity shares
Preference share
All of the above
Under which of the following circumstances a company is not likely to declare a higher dividend?
When the earnings of the company are high
When a company has a lucrative forthcoming business opportunity
When the cash flow position of the company is strong
None of the above
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.
Earnings
Stability of earnings
Stability of dividend
Growth prospects
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
Preference of shareholder
Earning
Cash flow position
Contractual constraints
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
Contractual constraints
Legal constraints
Access to capital market
Preferences of shareholders
Which of the following is not an objective of financial planning?
Ensuring enough funds are available at the right time
Ensuring excess availability of funds at the right time
Ensuring smooth business operations
All of the above
Arrange the following steps involved in the process of financial planning in the correct sequence
Estimation of expected profit, Preparation of a sales forecast, Preparation of financial statements
Preparation of a sales forecast, Preparation of financial statements, Estimation of expected profit
Preparation of a sales forecast, Estimation of expected profit, Preparation of financial statements
Preparation of financial statements, Estimation of expected profit, Preparation of a sales forecast
Which of the following is not a part of owners’ funds?
Equity shares
Reserves and surplus
Debentures
Preference shares
Which of the following statements is not true?
The cost of debt is higher than cost of equity.
The lender’s risk is lower then equity shareholder’s risk.
The interest paid on debt is treated as a tax deductible expense.
None of the above
In order to raise an additional capital of 50 lacs, Yudhister Limited has used debt because
Increased use of debt lowers the overall cost of capital
Decrease in use of debt lowers overall cost of capital
No effect
Increase in use of debt increases the overall cost of capital
If in a particular situation, the earnings per share (EPS) falls with the increased use of debt, it indicates that
The rate of return on investment (Rol) is less than the cost of debt.
The rate of return on investment is more than the cost of debt.
The cost of debt is less than the rate of return on investment.
None of the above
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