31. Which of this organization could be describe as having a legal entity, separate from its owners and managers?
A. K. Ofori Ventures
B. KHN Accountants and Associates
C. Okudzeto and Partners
D. Accra City Limited
32. What variable apart from a firm retained earnings from the profit and loss account makes up the shareholders equity?
A. Equity shares
B. Net working capital
C. Profits
D. Return on equity
33. Which of this may not be a component in an annual report?
A. Directors report
B. Auditors report
C. Financial statements
D. Employers report
34. Stocks with highly likely risk level, generally have lower return as the theory predicts.
A. TRUE
B. FALSE
35. All BUT one of the following is NOT a model used to compute cost of equity
A. Dividend Growth Model
B. Capital Asset Pricing Model
C. Dividend Valuation Model
D. Cost of Growth Model
36. How would you describe a market efficiency level which influenced investors public and private information sources?
A. Semi-strong efficiency
B. Strong-form efficiency
C. High-Form efficacy
D. Weak-form efficiency
37. A firm may raise additional equity to support its growth after initial public offering through which of the market?
A. Secondary market
B. Primary market
C. Derivative market
D. Tertiary market
38. Finance is vital for which of the following business activity (activities)?
A. Marketing Research
B. Product Pricing
C. Design of marketing and distribution channels
D. All of the given options
39. Which of the following terms refers to the use of debt financing?
A. Operating Leverage
B. Financial Leverage
C. Manufacturing Leverage
D. None of the given options
40. In which type of market, new securities are traded?
A. Primary market
B. Secondary market
C. Tertiary market
D. None of the given options
41. Time value of money is an important finance concept because:
A. It takes risk into account
B. It takes time into account
C. It takes compound interest into account
D. All of the given options
42. Which of the following ratios are particularly interesting to short-term creditors?
A. Liquidity Ratios
B. Long-term Solvency Ratios
C. Profitability Ratios
D. Market Value Ratios
43. Which one of the following is NOT a liquidity ratio?
A. Current Ratio
B. Quick Ratio
C. Cash Coverage Ratio
D. Cash Ratio
44. Which of the following is measured by profit margin?
A. Operating efficiency
B. Asset use efficiency
C. Financial policy
D. Dividend policy
45. A company having a current ratio of 1 will have __________ net working capital.
A. Positive
B. Negative
C. zero
D. None of the given options
46. Which of the following is a special case of annuity, where the stream of cash flows continues forever?
A. Ordinary Annuity
B. Special Annuity
C. Annuity Due
D. Perpetuity
47. You need GHS10,000 to buy a new television. If you have GHS6,000 to invest at 5 percent compounded annually, how long will you have to wait to buy the television?
A. 8.42 years
B. 10.51 years
C. 15.75 years
D. 18.78 years
48. How long will it take an amount to quadruple if invested in a mutual fund that pays 15.5% per annum?
A. 9.62 years
B. 8.5 years
C. 12.82 years
D. 4.65 years
49. In relation to the financial management of a company, which of the following provides the best definition of a firms primary financial objective?
A. To achieve longterm growth in earnings
B. To maximise the level of annual dividends
C. To maximise the wealth of its ordinary shareholder
D. To maximise the level of annual profits
50. Which of the following is not one of the three main types of decision facing the financial manager in a company?
A. Income decision
B. Investment decision
C. Dividend decision
D. Financing decision
51. The agency problem is a driving force behind the growing importance attached to sound corporate governance. In this context, who are the agents?
A. Customers
B. Shareholders
C. Managers
D. Auditors
52. Which of the following statements are correct?
I. Maximising market share is an example of a financial objective
II. Shareholder wealth maximisation is the primary financial objective for a company listed on a stock exchange
III. Financial objectives should be quantitative so that their achievement can be measured
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
53. ABC Ltd. has a Current Ratio of 1.5: 1 and liabilities of 500,000. What are the Current Assets?
A. GHS500,000,
B. GHS1,000,000,
C. GHS750,000,
D. GHS25,00,000
54. Which of the following refers to a conflict of interest between principal and agent?
A. Management Conflict
B. Interest Conflict
C. Agency Problem
D. None of the given options
55. Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods?
A. Ordinary annuity
B. Annuity due
C. Perpetuity
D. None of the given options
56. Which of the following is the process of planning and managing a firms long-term investments?
A. Capital Structuring
B. Capital Rationing
C. Capital Budgeting
D. Working Capital Management
57. Mr. Y and Mr. Z are planning to share their capital to run a business. They are going to employ which of the following type of business?
A. Sole-proprietorship
B. Partnership
C. Corporation
D. None of the given options
58. What would be the present value of GHS10,000 to be received after 6 years at a discount rate of 8 percent?
A. GHS6,302
B. GHS9,981
C. GHS14,800
D. GHS15,869
59. Suppose the total cost of a college education will be GHS5,000 in 12 years for a child. The Parents have GHS500 to invest today. What rate of interest must they earn on investment to cover the cost of the childs education?
A. 21%
B. 12%
C. 18%
D. 30%
60. Unigold Corporation stock is selling for GHS1.50 per share. The dividend paid is GHS0.35 per share and it is expected to grow 14% more or less indefinitely. What return does this stock offer?
A. 26.6%
B. 27.3%
C. 37.3%
D. 40.6%
