Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Strategic Financial Management Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email Area Pin Code 1. Which financial management decision involves deciding the best way to finance a company’s operations? Investment Decision Financing Decision Dividend Decision Liquidity Decision None 2. Which of the following is not a key element of strategic financial management? Risk management Short-term profit maximization Capital structure decisions Corporate valuation None 3. The primary aim of strategic financial management is: Increasing sales Maximizing shareholder wealth Reducing tax liabilities Increasing debt financing None 4. What is the role of a Chief Financial Officer (CFO) in strategic finance? Managing daily accounting tasks Implementing financial strategy and risk management Setting HR policies Managing customer relations None 5. Which concept helps firms in assessing their financial strategies in changing environments? Scenario Planning Zero-Based Budgeting Cost Leadership Asset-Based Valuation None 6. Which capital budgeting method measures profitability by discounting cash flows at the required rate of return? Payback Period Net Present Value (NPV) Accounting Rate of Return (ARR) None of the above None 7. What does a negative NPV indicate? The project should be rejected The project will increase firm value The IRR is greater than the cost of capital The project has no risk None 8. Which technique finds the discount rate at which NPV becomes zero? Internal Rate of Return (IRR) Payback Period Profitability Index Sensitivity Analysis None 9. Which of the following is a limitation of Payback Period? Ignores time value of money Considers all cash flows Measures risk accurately Considers capital structure decisions None 10. What does the Profitability Index (PI) measure? Ratio of present value of cash inflows to initial investment Time taken to recover investment Accounting profits over initial investment The amount of dividends paid None 11. Which risk cannot be eliminated through diversification? Business Risk Systematic Risk Operational Risk Credit Risk None 12. Which of the following is an example of unsystematic risk? Inflation Stock Market Crash Change in government policy Company fraud None 13. What does Beta measure in the Capital Asset Pricing Model (CAPM)? A stock’s total risk A stock’s systematic risk A firm’s overall profitability The book value of a firm None 14. Which of the following is a derivative instrument? Mutual Funds Treasury Bonds Futures Contracts Fixed Deposits None 15. Hedging is primarily used to: Increase risk Reduce financial risk Maximize short-term profits Avoid taxes None 16. Which of the following valuation methods uses projected future earnings? Market Capitalization Discounted Cash Flow (DCF) Book Value Dividend Yield None 17. The Gordon Growth Model is used to value companies based on: Earnings growth rate Dividend growth rate Market demand Current liabilities None 18. Which financial ratio is commonly used for relative valuation? Price-to-Earnings (P/E) Ratio Return on Assets (ROA) Inventory TurnoverQuick Ratio None 19. A higher Price-to-Earnings (P/E) ratio indicates: The stock is undervalued The stock is overvalued The company has high debt The company is not profitable None 20. Which valuation method considers the breakup value of a company’s assets? Market Valuation Asset-Based Valuation Earnings Valuation Dividend Discount Model None 21. A merger between two companies producing similar products in the same industry is called a: Horizontal Merger Vertical Merger Conglomerate Merger Reverse Merger None 22. Which restructuring strategy involves selling off a business unit? Divestiture Merger Acquisition Consolidation None 23. What is the main reason companies engage in mergers? To increase risk exposure To achieve synergy To reduce market share To avoid competition None 24. Which strategy is used to avoid hostile takeovers? Poison Pill White Knight Golden Parachute All of the above None 25. Which term refers to acquiring a company by taking on significant debt? Leveraged Buyout (LBO) Strategic Alliance Joint Venture Debt Refinancing None 26. Which of the following is not a component of working capital? Inventory Cash and Bank Balances Fixed Assets Accounts Receivable None 27. The primary objective of working capital management is to: Maximize profits Ensure liquidity and smooth operations Minimize tax liability Reduce production costs None 28. Which working capital financing strategy has the highest risk and return? Conservative Approach Aggressive Approach Moderate Approach Passive Approach None 29. Which of the following is an example of spontaneous financing? Bank loan Trade credit Debentures Equity capital None 30. Which ratio is used to measure a firm’s short-term liquidity? Debt-Equity Ratio Current Ratio Return on Equity (ROE) Price-to-Earnings (P/E) Ratio None 31. Which of the following is a source of equity financing? Debentures Term Loans Preference Shares Retained Earnings None 32. Which financial leverage ratio measures the proportion of debt in capital structure Current Ratio Debt-to-Equity Ratio Inventory Turnover Ratio Interest Coverage Ratio None 33. What does a high financial leverage indicate? High dependence on debt financing High return on investment Low financial risk Higher liquidity None 34. Which capital structure theory suggests an optimal mix of debt and equity to minimize cost of capital? Modigliani and Miller (M&M) Proposition I Traditional Approach Pecking Order Theory Dividend Irrelevance Theory None 35. What happens when a firm’s return on assets (ROA) is higher than the cost of debt Financial leverage increases shareholder value The firm incurs losses The firm should reduce debt The firm’s earnings decline None 36. Which of the following dividend policies ensures constant dividend payout ratio? Regular Dividend Policy Stable Dividend Policy Residual Dividend Policy Constant Payout Ratio Policy None 37. According to the Dividend Irrelevance Theory, what impacts stock price the most Dividend policy Earnings and profitability Dividend payout ratio Stock splits None 38. Which of the following factors affect a company's dividend decision? Profitability Liquidity position Shareholder preferences All of the above None 39. What is the primary advantage of stock dividends over cash dividends? No dilution of ownership Immediate cash inflow Improves liquidity of the company Helps in retaining earnings for growth None 40. When a company repurchases its own shares, it is called: Stock Split Share Buyback Bonus Issue Rights Issue None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
