Corporate Finance Multiple Choice Questions

Corporate Finance MCQs Page-8. The following Multiple Choice Questions are from the theory of Finance, that is Public Finance, Corporate Finance and Personal Finance. View answers to the questions at the bottom of the page.

Pages: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10

  1. The difference between the public-offer price and the price paid by the underwriter is called

    1. underpricing
    2. spread
    3. commission
    4. margin

  2. The underwriters receive their payments in the shape of
    1. underpricing
    2. spread
    3. commission
    4. margin

  3. Rights issues are for
    1. managers
    2. directors
    3. existing shareholders
    4. new shareholders

  4. The interest rate earned if a financial asset is held until its maturity is called

    1. term structure
    2. spinning
    3. yield
    4. spread

  5. The price of a stock is $100, and it could be $95 or $115 the next year. What is the expected return?

    1. 5%
    2. 6%
    3. 7%
    4. 7.5%

  6. The price of a stock is $100, and there are 40% chances that it would be $95 and 60% chances that it would be $115 the next year. What is the expected return?

    1. 5%
    2. 6%
    3. 7%
    4. 7.5%

  7. A company's agreement with the underwriter include
    1. spread
    2. greenshoe option
    3. A and B
    4. whiteshoe option

  8. The long-run returns of Initial Public Offerings (IPOs) tend to __________ the market.

    1. underperform
    2. accelerate
    3. amplify

  9. Spread is __________ for IPOs.
    1. highest
    2. lowest
    3. average
    4. uncertain

  10. The value of a financial derivative depends on the
    1. maturity
    2. duration
    3. forward interest rate
    4. underlying

ANSWERS: CORPORATE FINANCE MULTIPLE CHOICE QUESTIONS

  1. B
  2. B
  3. C
  4. C
  5. A
  6. C
  7. C
  8. A
  9. A
  10. D