1431. In order to find out cost of equity capital under CAPM, which of the following is not required ___________.

A. Beta factor
B. Market Rate of return
C. Market price of equity share *
D. Risk-free rate of interest

1432. Tax-rate is relevant and important for calculation of specific cost of capital of ___________.

A. Equity share capital
B. Preference share capital
C. Debentures *
D. A and B

1433. Advantage of Debt financing is _____________.

A. Interest in tax-deductible
B. It reduces WACC
C. Does not dilute owners control
D. All of the above *

1434. Cost of issuing new shares to the public is known as _________.

A. Cost of equity
B. Cost of capital
C. Flotation cost *
D. Marginal cost of capital

1435. Cost of equity share capital is more than cost of debt because ________.

A. Face value of debentures is more than face value of shares
B. Equity shares have higher risk than debt *
C. Equity shares are easily saleable
D. All of the three above

1436. Which of the following is not a generally accepted approach for calculation of cost of equity?

B. Dividend discount model
C. Rate of Pref.Divident plus risk *
D. Price-Earnings ratio

1437. Operating leverage helps in analysis of _________.

A. Business risk *
B. Financing risk
C. Production risk
D. Credit risk

1438. Which of the following is studied with the help of financial leverage ?

A. Marketing Risk
B. Interest Rate Risk
C. Foreign Exchange Risk
D. Financing Risk *

1439. Combined leverage is obtained from OL and FL BY their_________.

A. Addiction
B. Subtraction
C. Multiplication *
D. Any of these

1440. High degree of financial leverage means ________.

A. High debt proportion *
B. Lower debt proportion
C. Equal debt and equity
D. No debt