1491. Which of the following is incorrect for value of the firm?

A. In the initial preposition, MM model argues that value is independent of the financing mix.
B. Total value of levered and unlevered firms is otherwise arbitrage will take place
C. Total value incorporates borrowings by firm but excludes personal borrowing .
D. Total value does not change because underlying does not change wit financing mix . *

1492. Which of the following appearing in the balance ! generates tax advantages and hence affects the c, structure decision ?

A. Reserves and surplus
B. Long-term debt *
C. Preference share capital
D. Equity share capital

1493. In MM model with taxes, where ‘r’ is the interest rate , ‘D’ is the total debt and ‘t’ is tax rate, then present valued shields would be _____.

A. r*D*t
B. r*D
C. D*t 
D. (D*r)/(I-t)

1494. Walter’s model suggests for 100% DP Ratio when ________.

A. ke = r (
B. ke < r
C. ke > r 
D. ke = o

1495. If a firm has ke> r the walter’s model suggests for ________.

A. 0 % Payout *
B. 100 % Payout
C. 50 % Payout
D. 25 % Payout

1496. Walter’s model suggests that a firm can always increase i-e of the share by _________.

A. Increasing Dividend
B. Decreasing Dividend
C. Constant Dividend
D. None of the above *

1497. ‘ Bird in hand’ argument is given by _______.

A. Walker’s model
B. Gordon ‘s model *
C. MM Mode
D. Residuals Theory

1498. Residuals theory argues that dividend is a ________.

A. Relevant Decision
B. Active Decision
C. Passive Decision *
D. Irrelevant Decision

1499. Dividend irrelevance argument of MM model is based on _______.

A. Issue of Debentures
B. Issue of Bonus Share
C. Arbitrage *
D. Hedging

1500. Which of the following is not true for MM Model?

A. Share price goes up if dividend is paid
B. Share price goes down if dividend is not paid
C. Market value is unaffected by dividend policy *
D. All of the above