List of top Business Studies Questions on Business Finance

Match List-I with List-II.
List-I (Characteristic)List-II (Concept)
(A) More debt can be used if debt can be raised at a lower rate(I) Cost of debt
(B) Since interest is a deductible expense, cost of debt is affected by the tax rate(II) Risk Consideration
(C) If a firm’s business risk is lower, its capacity to use debt is higher and vice-versa(III) Tax Rate
(D) A public issue of equity may reduce the management’s holding in the company(IV) Control
Choose the correct answer from the options given below :
Debt is____cheaper, but more__risky for a business because the payment of interest and the return of principal is obligatory for the business.
A proper matching of funds requirements and their availability is sought to be achieved by .
Financial management aims at choosing the best investment and financing alternatives. Its objective is to:
Match List I with List II
LIST ILIST II
A. Fixed capitalII. Investment in non-current assets
B. Working capitalIII. Investment in current assets
C. Interest coverage ratioI. EBIT/interest
D. Financial leverageIV. Proportion of debt in the capital structure