Tag: business studies

Questions Related to business studies

A firm can only issue debt or equity as a source of finance. It cannot issue both at the same time.

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

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False.

Firm can issue equity and debt at the same time.
Debt financing is capital acquired through the borrowing of funds to be repaid at a later date. Common types of debt are loans. The benefit of debt financing is that it allows a business to leverage a small amount of money into a much larger sum, enabling more rapid growth than might otherwise be possible.
Equity financing refers to funds generated by the sale of stock.

Who formulated the following model for estimating the market price of equity share?
$P = \dfrac {D + \dfrac {R _{a}}{R _{c}}(E - D)}{R _{c}}$
Where, $P =$ Market price of equity share
$D = DPS$
$E = EPS$
$E - D =$ Retained earning per share
$R _{a} =$ Internal rate of return on investment
$R _{c} =$ Cost of capital.

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

  1. Modigliani-Miller

  2. Myron-Gordon

  3. James E. Walter

  4. Clarkson and Elliot

Show answer
Correct Option: C
Explanation:
Professor James E. Walter that the choice of dividend policies almost always affects the value of the enterprise. His model shows clearly the importance of the relationship between the firm’s internal rate of return (r) and its cost of capital $(k)$ in determining the dividend policy that will maximize the wealth of shareholders.

Walter’s formula to calculate the market price per share (P) is:

$P=\cfrac {\cfrac {D}{k}+\cfrac {E-D}{k} \times r} {k}$

P = market price per share
D = dividend per share
E = earnings per share

Which one of the following is not among the assumptions of the Modigliani-Miller model?

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

  1. Perfect capital market

  2. Equivalent risk classes

  3. Unity for dividend payout ratio

  4. Absence of taxes

Show answer
Correct Option: C
Explanation:

According to Modigliani and Miller (M-M), dividend policy of a firm is irrelevant as it does not affect the wealth of the shareholders. They argue that the value of the firm depends on the firm’s earnings which result from its investment policy. 
Modigliani and Miller model is based on the following assumptions : 
1. The firm operates in perfect capital market.

2.The firm has a fixed investment policy.
3. Absence of taxes.
4. Risk of uncertainty does not exist. That is, investors are able to forecast future prices and dividends with certainty and one discount rate is appropriate for all securities and all time periods.

Dividend warrants must be posted within ______ days from the date of declaration of dividend.

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

  1. 24

  2. 34

  3. 30

  4. 45

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Correct Option: C

Hindusthan zinc limited is situated at ____________.

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  1. Bhiwadi

  2. Pilani

  3. Jodhpur

  4. Udaipur

Show answer
Correct Option: D
Explanation:

Hindusthan zinc limited is situated at Udaipur.

HZL operates Zinc and Lead smelters and refineries at Chanderiya (Chittorgarh), Debari (Udaipur) & Dariba (Rajsamand) in Rajasthan with total zinc and lead production capacity of 1.0 million tonnes. A smelting facility was established at Pantnagar in Uttarakhand.

Which of the following is an agricultural and seasonal industry?

business studies tourism development in rajasthan tourism and transportation transportation in rajasthan tour and travel management

  1. Cement industry

  2. Iron and steel industry

  3. Automobile industry

  4. Sugarcane industry

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Correct Option: D
Explanation:

Sugarcane industry is both seasonal and agricultural industry.
Sugarcane belongs to the grass family Poaceae, an economically important seed plant family that includes maize, wheat, rice, and sorghum, and many forage crops. Sucrose, extracted and purified in specialized mill factories, is used as raw material in the food industry or is fermented to produce ethanol.

The famous Dilevara Temples are situated in _________________.

business studies tourism development in rajasthan tourism and transportation transportation in rajasthan tour and travel management

  1. Uttar Pradesh

  2. Rajastan

  3. Maharashtra

  4. Madhya Pradesh

Show answer
Correct Option: B
Explanation:

The Dilwara temples of India are located about 2½ kilometers from Mount Abu in Rajasthan. These Jain temples were built by Vimal Shah and designed by Vastupal-Tejpal, Jain laymen between the 11th and 13th centuries AD and are world-famous for their stunning use of white marble and intricate marble cravings.

The 'Khetri mines' in Rajasthan is known for the production of _______.

business studies tourism development in rajasthan tourism and transportation transportation in rajasthan tour and travel management

  1. Zinc

  2. Steel

  3. Copper

  4. Aluminium

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Correct Option: C
Explanation:

Khetri Nagar is a town in Jhunjhunu district of Rajasthan in India. It is part of the Shekawati region. Khetri is actually two towns, "Khetri Town" founded by Raja Khet Singhji Nirwan and "Khetri Nagar" which is about 10 km away from Khetri. Khetri Nagar, well known for its Copper Project, was built by and is under the control of Hindustan Copper Limited, a public sector undertaking under the Government of India. Khetri Nagar is also very well known with name of 'Copper'.

 

The main problem of small and cottage industry is ________________.

business studies tourism development in rajasthan tourism and transportation transportation in rajasthan tour and travel management

  1. Shortage of financial resources

  2. Limited market

  3. Lack of research and modern technology

  4. All of these

Show answer
Correct Option: D
Explanation:
The main problem of small and cottage industry are:-
In these economies, cottage industries play a vital role in the economy in regions like Asia and South America. One of the ways they serve the economy is the provision of employment, especially since they involve a lot of labor. In urban areas, the income generated is likely negligible. However, these kinds of workshops in rural places can actually raise sufficient income to supplement the income from selling crops. These workshops can sell their 
goods in a local market or seek an eternal one.

As the country develops and the amount of wages increases, these industries are forced to adapt and acquire newer technologies. Consequently, they will also have to compete with other firms for experienced labor, which further increases the challenges. Those industries that can adapt end up making the most profit while others close up or stagnate.

Cotton industry fall under which of the following categories _______________.

business studies tourism development in rajasthan tourism and transportation transportation in rajasthan tour and travel management

  1. small scale industry

  2. cottage industry

  3. large scale industry

  4. none of these

Show answer
Correct Option: C
Explanation:

Cotton plays an important role in the Indian economy as the country's textile industry is predominantly cotton based and is a large scale Industry. India is one of the largest producers as well as exporters of cotton yarn and the Indian textile industry contributes about 11 percent to industrial production, 14 per cent to the manufacturing sector, 4 percent to the GDP and 12 per cent to the country's total export earnings. The cotton cultivation in India in 2013-14 was estimated at 37 million bales (170 kg each) of cotton, making it the second largest producer of cotton worldwide.