Select the correct Option and Rewrite the Sentence (Weightage 5 Marks)
1. Introduction to Corporate Finance
1) ______ is related to money and money management.
a) Production
b) Marketing
c) Finance
Ans:- c) Finance
2) Finance is the management of ______ affairs of the company
a) monetary
b) marketing
c) production
Ans:- a) monetary
3) Corporation finance deals with the acquisition and use of ______ by business
a) corporation.
b) goods
c) capital
d) land
Ans:- c) capital
4) Company has to pay ______ to government.
a) taxes
b) dividend
c) interest
Ans:-a) taxes
5) ______ refers to any kind of fixed assets.
a) Authorised capital
b) Issued capital
c) Fixed capital
Ans:- c) Fixed capital
6)______ refers to the excess of current assets over current liabilities.
a) Working capital
b) Paid-up capital
c) Subscribed capital
Ans:- a) Working capital
7) Manufacturing industries have to invest ______ amount of funds to acquire fixed assets.
a) huge
b) less
c) minimal
Ans:-a) huge
8) When the population is increasing at high rate, certain manufacturers find this as an opportunity to ______ business.
a) close
b) expand
c) contract
Ans:- b) expand
9) The sum of all ______ is gross working capital.
a) expenses
b) current assets
c) current liabilities
Ans:- b) current assets
10) ______ means mix up of various sources of funds in desired proportion. (Not for March 2022 Exam)
a) Capital budgeting
b) Capital structure
c) Capital goods
Ans:- b) Capital structure
2. Sources of Corporate Finance
1. …………….. is a smallest unit in the total share capital of the company.
a) Debenture b) Bonds c) Share
Ans: c) Share
2. The benefit of Depository Receipt is ability to raise capital in …………….. market.
a) National b) Local c) International
Ans: c) International
3. …………….. are residual claimants against the income or assets of the company.
a) Bondholders b) Equity Shareholders c) Debentureholders
Ans: b) Equity Shareholders
4. …………….. participate in the management of their company.
a) Preference shareholders b) Depositors c) Equity shareholders
Ans: c) Equity shareholders
5. …………….. shares are issued free of cost to existing equity shareholders.
a) Bonus b) Right c) Equity
Ans: a) Bonus
6. The holder of preference share has right to receive …………….. rate of divided.
a) fixed b) fluctuating c) lower
Ans: a) fixed
7. Accumulated dividend is paid to …………….. preference shares.
a) redeemable b) cumulative c) convertible
Ans: b) cumulative
8. The holder of …………….. preference shares have right to convert their shares into equity
shares.
a) cumulative b) convertible c) redeemable
Ans: b) convertible
9. Debenture holders are …………….. of the company.
a) creditors b) owners c) suppliers
Ans: a) creditors
10. …………….. is paid on borrowed capital.
a) Interest b) Discount c) Dividend
Ans: a) Interest
11. Debentureholders get fixed rate of …………….. as return on their investment.
a) interest b) dividend c) discount
Ans: a) interest
12. Convertible debentures are converted into…………….. after a specific period.
a) equity shares b) deposits c) bonds
Ans: a) equity shares
13. Retained earnings are …………….. source of financing.
a) internal b) external c) additional
Ans: a) internal
14. The holder of bond is …………….. of the company.
a) secretary b) owner c) creditor
Ans: c) creditor
15. Company can accept deposits from public, minimum for …………….. months.
a) six b) nine c) twelve
Ans: a) six
16. Company can accept deposits from public, maximum for …………….. months.
a) 12 b) 24 c) 36
Ans: c) 36
17. A depository receipt traded in …………….. is called American Depository receipt.
a) London b) Japan c) U.S.A.
Ans: c) U.S.A.
3. Issue of Shares
1. ……………… refers to capital made up of Equity and preference shares
a) Share capital b) Debt capital c) Reserve fund
Ans:- a) Share capital
2. ……………… capital refers to maximum capital a company can raise by issuing shares. (Not for March 2022 Exam)
a) Issued b) Authorised c) Paid up
Ans:- b) Authorised
3. ……………… means shares are offered to the public.
a) Rights Issue b) Private Placement c) Public Issue
Ans:- Public Issue
4. Under ……………… method, issue price of shares is based on bidding.
a) Book Building b) Fixed Price c) Bonus Issue
Ans:- a) Book Building
5. In ………………, shares of a company are offered to the public for the first time.
a) Further Public Offer b) Initial Public Offer c) Public Offer
Ans:- b) Initial Public Offer
6. ……………… is offered to existing equity shareholders.
a) IPO b) ESOS c) Rights Issue
Ans:- c) Rights Issue
7. Bonus shares are issued free of cost to ……………… .
a) existing Equity shareholders b) existing employees c) Directors
Ans:- a) existing Equity shareholders
8. ……………… are offered to permanent employees, Directors and Officers of a company.
a) Bonus Shares b) Rights Issue c) ESOS
Ans:- c) ESOS
9. Under ………….., a company offers its securities to a select group of persons not exceeding
200.
a) Private Placement b) IPO c) Public Offer
Ans:- a) Private Placement
10. The ……………… have the power to allot shares.
a) Director b) Board of Directors c) Company Secretary
Ans:- b) Board of Directors
11. Letter of ……………… is sent to applicants who have been given shares by the company.
a) Regret b) Renunciation c) Allotment
Ans:- c) Allotment
12. ……………… is a proof of title to Shares.
a) Share Certificate b) Register of Member c) Letter of Allotment
ansn:- a) Share Certificate
13. The gap between two calls should not be less than ……………… .
a) 14 days b) One month c) 21 days
Ans:- b) One month
14. Company can ……………… shares on non-payment of calls. (Not for March 2022 Exam)
a) forfeit b) surrender c) allot
Ans:- a) forfeit
15. Voluntarily giving away one’s share to another person is called as ……………… of shares. (Not for March 2022 Exam)
a) Transfer b) Transmission c) Surrender
ans:- a) Transfer
16. ……………… of shares takes place due to operation of law.
a) Forfeiture b) Allotment c) Transmission
Ans:- c) Transmission
4. Issue of Debentures
1. A company cannot issue ……………… with voting rights.
a) Equity shares b) Debentures c) Securities
Ans:- b) Debentures
2. A company can issue ……………… convertible debentures.
a) Only partly b) Only fully c) Partly or fully
Ans:- c) Partly or fully
3. Money from ……………… Account is used for redemption of debentures
a) Capital b) Debenture Redemption Reserve c) Profit or loss
Ans:- b) Debenture Redemption Reserve
4. ……………… protects the interest of debenture holders
a) Debenture Trustees b) Debenture holders c) Redemption Reserve
Ans:- a) Debenture Trustees
5. Secured debentures must be redeemed within ……………… from the date of its issue
a) 10 days b) 10 years c) 15 years
Ans:-b) 10 years
6. A company issuing ……………… debenture must create a charge on the assets of the company.
a) Secured b) Unsecured c) Redeemable
Ans:- a) Secured
7. Debenture certificate must be issued within ……………… of allotment of debentures.
a) 3 months b) 6 months c) 60 days
Ans:- b) 6 months
8. The details of allotment of Debentures must be entered in ……………… .
a) Register of debenture b) Register of members c) Register of creditors
Ans:- a) Register of debenture
9. A company which issues prospectus or invites more than 500 persons to buy its debenture has to appoint ……………… .
a) Register of companies b) Debenture holders c) Debenture trustees
Ans:- c) Debenture trustees
10. The contract between company and Debenture trustees of companies is called as ………………
a) Debenture trust deed b) Letter of offer c) Prospectus
ans:- a) Debenture trust deed
11. Procedure for allotment of Debenture should be completed within ……………… from the date of receipt of applications.
a) 6 months b) 3 months c) 60 days
Ans:- c) 60 days
5. Deposits
1. Deposit is a type of …………………………………………. .
a) Owned capital b) Short term loan c) Long term loan
Ans:- b) Short term loan
2. Eligible public company and Government Company can collect deposits from …………………….
a) It’s employees b) Public c) RBI
Ans:- b) Public
3. Private company can accept deposits from its member or Directors upto not more than ………………. % of its aggregate of paid-up share Capital and free reserves.
a) 100 b) 35 c) 25
Ans:- a) 100
4. A ………………………………….. Company can accept deposits from public not exceeding 35% of its paid-up share Capital and free reserves.
a) Government b) Private c) Eligible Public
Ans:- a) Government
5. Deposit can be accepted for a minimum of 6 months and maximum for …………. months.
a) 36 b) 3 c) 30
Ans:- a) 36
6. Company issues ……………………………………. to invite its members to subscribe for its deposit scheme.
a) Advertisement b) Circular c) Newspaper
Ans:-b) Circular
7. Company can issue circular or advertisement for inviting deposits after …………. days of filing it with Registrar of Companies.
a) 30 b) 21 c) 7
Ans:- a) 30
8. Company has to appoint ………………………………. to protect the interest of depositors.
a) Debenture Trustees b) Deposit Trustees c) Credit Rating Agency
Ans:- b) Deposit Trustees
9. Charge on assets is to be created when a company issues ……………………
a) Unsecured deposit b) Unsecured Debenture c) Secured deposit
Ans:- c) Secured deposit
10. Deposit Receipt is issued within …………. days of receipt of deposit.
a) 7 b) 30 c) 21
Ans:-c) 21
11. For premature repayment of deposit, company deducts …………………… % of interest.
a)1 b) 18 c) 20
Ans:-a)1
12. Return of deposit must be filed every year on or before ……………………
a) 30th June b) 31st March c) 30th April
Ans:- a) 30th June
6. Correspondence with Members
1. Directors are the ……………… .
a) paid employee of the company
b) representatives of the share holders
c) creditors of the company
Ans:- b) representatives of the share holders
2. Dividend is to be paid to the shareholders within ………….. days from the date of declaration.
a) 30 b) 40 c) 20
Ans:- a) 30
3. Registered shareholders receive dividend through ………….. warrant.
a) share b) debenture c) dividend
Ans:- c) dividend
4. Shares issued free of cost to the shareholders are known as …………….. shares.
a) preference b) equity c) bonus
Ans:- c) bonus
5. Share Certificate should be ready for delivery by the company within …………….. months after the allotment of shares.
a) 3 b) 5 c) 2
Ans:- c) 2
6. Secretarial correspondence with members should be …………….. .
a) lengthy b) shortcut c) prompt and precise
Ans:- c) prompt and precise
7. Dividend is recommended by …………….. .
a) Board of Directors b) shareholders c) Depositors
Ans:- a) Board of Directors
8. Dividend is paid out of …………….. of the company.
a) Capital b) Building Fund c) Profit
Ans:- c) Profit
9. …………….. is issued by the company to its registered shareholders after the declaration of dividend at the Annual General Meeting of the company.
a) Dividend Warrant b) Interest Warrant c) Share Warrant
Ans:- a) Dividend Warrant
7. Correspondence with Debentureholders
1. Debenture capital is a ……………… capital of a company.
a) borrowed b) owned c) permanent
Ans:- a) borrowed
2. Debenture holders are …………….. of the company.
a) Owners b) Creditors c) Debtors
Ans:- b) Creditors
3. Borrowed Capital is provided to the company by ………………….
a) Equity shareholder b) Debenture holder c) Preference shareholder
Ans:- b) Debenture holder
4. Interest on Registered Debentures is given through …………….. .
a) Interest coupons b) Interest warrant c) Refund order
Ans:- b) Interest warrant
5. …………….. are the creditors of the company.
a) Shareholders b) Debenture holders c) Directors
Ans:- b) Debenture holders
6. Bearer Debenture holders get interest through ……………………… .
a) Interest Warrants b) Refund orders c) Interest coupons
ans:- c) Interest coupons
7. Return of income on debentures is …………….. at fixed rate.
a) Dividend b) Loan c) Interest
Ans:- c) Interest
8. …………….. is an acknowledgement of debt issued by the company under common seal.
a) Debentures b) Shares c) Reserve
Ans:- a) Debentures
9. Debentures repayable after a certain period are …………….. debentures.
a) Convertible b) Registered c) Redeemable
Ans:- c) Redeemable
10. The rate of interest payable on debentures is …………….. .
a) uncertain b) floating c) fixed
Ans:- c) fixed
11. Debenture holders receive ………………………. certificate from the company.
a) Share b) Bond c) Debenture
Ans:- c) Debenture
12. Interest warrants are sent to ………………………. of the company.
a) Shareholders b) Debenture holders c) Owners
Ans:- b) Debenture holders
8. Correspondence with Depositors
1. Depositors are …………………….. of a company.
a) Members b) Creditors c) Debtors
Ans:- b) Creditors
2. Depositors provide …………………….. Capital to the company.
a) Short Term b) Long Term c) Medium term
Ans:- a) Short Term
3. A Company cannot accept deposit for more than …………………….. months.
a) 24 b) 36 c) 45
Ans:- b) 36
4. A company cannot accept deposit for less than …………………….. months.
a) 6 b) 3 c) 5
Ans:- a) 6
5. Deposits are …………………….. loans of the company.
a) fixed b) short term c) long term
Ans:- b) short term
6. Public Deposits are accepted to meet the requirement of …………………….. Capital.
a) fixed b) working c) owned
Ans:- b) working
7. …………………….. has the power to invite deposits from Public.
a) Shareholders b) Auditors c) Board of Directors
Ans:- c) Board of Directors
8. Rate of interest on deposits is …………………….. .
a) fixed b) fluctuating c) moderate
Ans:- a) fixed
9. The return or income for the investment of money on deposits is called ………………………
a) Dividend b) Interest c) Discount
Ans:-b) Interest
9. Depository System
1. In physical mode, securities are held in ………………………………… form.
a) Paper b) Dematerialization c) Electronic
Ans:- a) Paper
2. Risk of losing certificates exists in ………………………………… mode.
a) Physical b) Dematerialised c) Digital
Ans:-a) Physical
3. In Depository System, securities are held in ………………………………… form.
a) Scrip based b) electronic c) Physical
Ans:- b) electronic
4. ………………………………… is the institute which facilitates electronic holding of securities.
a) Depository participant b) Issuer c) Depository
Ans:- c) Depository
5. There is no payment of …………….. when securities are demated.
a) Octroi b) Wealth Tax c) Stamp Duty
Ans:- c) Stamp Duty
6. Depository Act was passed in …………………………………
a) 1919 b) 1996 c) 1999
Ans:- b) 1996
7. India has a ………………….. depository system.
a) sole b) multi c) single
Ans:- b) multi
8. ………………….. is a constituent of depository system.
a) Government b) Issuer c) Trust
Ans:-b) Issuer
9. ………………….. is the oldest depository in India.
a) Dow Jones b) NSDL c) CDSL
Ans:-b) NSDL
10. Demat account is opened by ………………….. .
a) Beneficial Owner b) CDSL c) SEBI
Ans:- a) Beneficial Owner
11. Demated shares are………………….. .
a) Non-transferable b) Fungible c) Bearer
Ans:-b) Fungible
12. ………………….. is a unique code given to a security.
a) IBM b) BBM C) ISIN
Ans:-C) ISIN
13. In India ISIN for corporate securities is allotted by …………………..
a) NSDL b) Central Govt. c) State Govt.
Ans:- a) NSDL
14. ………………….. has to apply for ISIN.
a) Company b) Depository participant c) Depositors
Ans:- a) Company
15. ………………….. has to pay charges to maintain Demat Account.
a) Investor b) Issuer c) Depository
Ans:- a) Investor
16. NSDL is promoted by …………………..
a) NSE b) BSE c) FTSE
Ans:- a) NSE
17. CDSL is promoted by …………………..
a) NSE b) BSE c) FTSE
Ans:- b) BSE
10. Dividend and Interest
1. Dividend is paid to …………………………….
a) Shareholder b) Debenture holder c) Depositor
Ans:- a) Shareholder
2. ……………………………. is profit shared by company with a shareholder.
a) Interest b) Rent c) Dividend
Ans:- c) Dividend
3. Dividend is recommended by ……………………………. .
a) Managing Director b) Secretary c) Board of Directors
Ans:- c) Board of Directors
4. Interim Dividend is declared by ……………………………. .
a) Board of Directors b) Debenture holders c) Depositors
Ans:- a) Board of Directors
5. Final Dividend is declared by ……………………………. .
a) Board of Directors b) Shareholders c) Depositors
Ans:- b) Shareholders
6. Dividend cannot be declared out of ……………………………. .
a) Capital b) Profit c) Reserves
Ans:- a) Capital
7. Dividend amount should be transferred in a separate Bank Account within ……………….. days of its declaration.
a) 5 b) 15 c) 50
Ans:- a) 5
8. Dividend should be paid within ……………………………. days of its declaration.
a) 3 b) 13 c) 30
Ans:- c) 30
9. …………………. holders get dividend from residual profits.
a) Equity share b) Preference share c) Debenture
Ans:- a) Equity share
10. Dividend is paid first to …………………. shareholders.
a) Equity b) Preference c) Deferred
Ans:- b) Preference
11. …………………. warrant is a cheque containing dividend amount sent by company to the shareholders.
a) Dividend b) Share c) Interest
Ans:- a) Dividend
12. IEPF is created by …………………. where unpaid dividend is transferred by company.
a) Central Govt. b) Company c) Shareholders
Ans:- a) Central Govt.
13. Payment of …………………. Dividend must be authorised by the Articles of Association.
a) Interim b) Final c) Bonus
Ans:- a) Interim
14. ………………… is a return paid to creditors by the company.
a) Dividend b) Interest c) Rent
Ans:- b) Interest
15. ………………… is not linked to profits of the company.
a) Dividend b) Interest c) Bonus
Ans:- b) Interest
11. Financial Market
1. A financial market is a market in which people trade …………….. and derivatives at low transaction costs.
a) Gold b) Financial securities c) Commodities
Ans:- b) Financial securities
2. When the trade bills are accepted by commercial banks it is known as ……………..
a) Treasury bills b) Commercial bills c) Commercial papers
Ans:- b) Commercial bills
3. Money market is a market for lending and borrowing of funds for …………….. term.
a) short b) medium c) long
Ans:-a) short
4. Central Government is a borrower in the money market through the issue of ……………..
a) Commercial Papers b) Trade Bills c) Treasury Bills
Ans:- c) Treasury Bills
5. …………….. is the market for borrowing and lending long term capital required by business enterprises.
a) Money Market b) Capital Market c) Gold Market
Ans:- b) Capital Market
12. Stock Exchange
1. A stock exchange is where stock brokers and traders can buy and sell ………………..
a) gold b) securities c) goods
Ans:- b) securities
2. The …………………………….. is the first stock exchange to be recognized by the Indian Government under the Securities Contracts (Regulation) Act.
a) BSE b) NSE c) OTCEI
Ans:- a) BSE
3. ……………………………. is a dealer in stock exchange who carries on trading of securities in his own name.
a) Jobber b) Broker c) Bull
Ans:- a) Jobber
4. A ……………………………. who expects fall in price of a securities.
a) bull b) bear c) jobber
Ans:- b) bear
5. The practice of buying and selling within the same trading day before the close of the market on that day is called …………………………….
a) insider trading b) day trading c) auction
Ans:- b) day trading