Practice Test

Q1) A company has a profit attributable to ordinary shareholders of £ 1,00,000. The number of ordinary shares of £ 1 in issue during the year was 3,00,000. The market value of the company's shares at the year end was £ 6.50. The price/earnings ratio for this company is: Show Answer

Q2) What does the price/earnings (PE) ratio measure? Show Answer

Q3) What does the price-to-earnings ratio (P/E) tell you? Show Answer

Q4) What is the most important use of the P/E ratio for investors? Show Answer

Q5) What does a high P/E ratio suggest? Show Answer

Q6) High P/E ratios tend to indicate that a company will ................ Show Answer

Q7) Historically, P/E ratios have tended to be ................ Show Answer

Q8) Market price per share of a firm having equity capital of Rs. 1,00,000 consisting of shares of Rs. 10 each, profit after tax of Rs. 82,000 and P/E ratio of 8 is Show Answer

Q9) The objective of Ind as 32 is to establish principles for presenting financial instruments: Show Answer

Q10) Which of the followings are generally not within scope of Ind As - 32? Show Answer

Q11) There are various ways in which a contract to buy or sell a non-financial item can be settled net in cash or another financial instrument or by exchanging financial instruments. These include: Show Answer

Q12) Which of the followings comes within definition of financial assets? Show Answer

Q13) Which of the followings comes within definition of financial liabilities? Show Answer

Q14) Fixed assets which are subsequently measured in accordance with the revaluation model in Ind AS 16 Property, Plant and Equipment are not within the scope of Ind AS 113 in terms of both measurement and disclosure. Show Answer

Q15) Ind AS 113 Appendix A notes that an orderly transaction is: Show Answer

Q16) 'Most advantageous market' (Ind AS 113 Appendix A) is defined as: Show Answer

Q17) Ind AS 113 Appendix a notes that highest and best use (HBU) is: Show Answer

Q18) Ind AS 113 Appendix A notes that transport costs are: Show Answer

Q19) On 1, April, 2017, H Ltd. acquired 120000 shares out of 150000 equity shares of Rs. 10 each of S Ltd. at Rs. 16,30,000. On that date balance of General Reserve; Capital Reserve; and Preliminary Expenses in S Ltd. were Rs. 2,42,000; Rs. 3,20,000; and Rs. 70,000 respectively. The amount of cost of control will be Show Answer

Q20) Trailing P/E is its current market price divided by Show Answer

Q21) VINTEX LTD. had 5,00,000 equity shares outstanding on April 01, 2008. The average fair value per share during the year 2008-09 was Rs. 40. The company has given share option to its employees of 1,00,000 shares at option price of Rs. 30. If net profit attributable to equity shareholders for the year ended March 31, 2009 is f 12 lakh, Diluted EPS would be. Show Answer

Q22) Which of the following is not a valuation approach?
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Q23) P Ltd. has 12% Debentures of Rs 40 Lakh and 13% Debentures of Rs 60 Lakh. If the corporate tax rate is 30%, then combined cost of debt after tax will be:
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Q24) Which of the following Ind AS deals with "Financial
Instruments: Presentation"? Show Answer

Q25) Ind AS 33 deals with
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Q26) When the required rate of return is equal to the coupon rate, then the market value of a bond is
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Q27) Which of the following investment decision is required to be taken for a stock. If its intrinsic value is greater than its market value?
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Q28) P Ltd. issue 50,000 8% Debenture at a discount of 5%. The tax rate is 50%. The cost of debt capital is
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Q29) A Ltd. invested 500 lakh in assets. There are 50,00,000 shares outstanding. The par value of share is 10. It earns a rate of 15% on its investment and has a policy of retaining 60% of the earning. Growth rate is
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Q30) D Ltd. has the following details:
Return on equity: 10%
Expected earnings per share: Rs 10
Pay-out ratio: 30%
Required rate of return: 5% per annum
Price of share of D Ltd. is Show Answer

Q31) An increase in earnings per share or a reduction in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised or that ordinary shares are issued upon the satisfaction of specified conditions is
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Q32) Following are the objectives of:
(1) To determine Fair Value.
(2) To set out a single Ind AS framework for measuring fair value. (3) To require disclosures with respect to fair value measurements. Show Answer

Q33) ABC Ltd. has 50,00,000 in long term debts, Rs 10,00,000 in preferred stock and Rs 40,00,000 in common equity. All the values are on market value. The before tax cost of debts 10%. Cost of preferred stock are 11% and cost of common equity is 15%. Assume a tax rate of 40%. The overall cost of capital is
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Q34) Ind AS 33 deals with....
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Q35) Which of the following is NOT a valuation approach?
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Q36) Under Section 247 of the Companies Act, 2013, a Registered Valuer shall be appointed by the...........
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