Business Studies MCQ Class 12 Chapter 9: Check the below NCERT MCQ Questions for Business Studies MCQ Class 12 Chapter 9 with Answers Pdf free download. Business Studies MCQ Class 12 Chapter 9 Questions for Business Studies with Answers were prepared based on the latest exam pattern. We have provided Business Studies MCQ Class 12 Chapter 9 with Answers to help students understand the concept very well.

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Business Studies MCQ Class 12 Chapter 9

1. When does the earnings per share (EPS) rise with higher debt?
(a) When the rate of return on investment is higher than the rate of interest
(b) When the rate of return on investment is lower than the rate of interest
(c) When the rate of interest is more than the rate of return
(d) None of the above

2. Investment decision involves
(a) investment in fixed assets
(b) investment in current assets
(c) investment in fixed and current assets
(d) investment in Government securities.

3. A higher financial leverage ratio indicates that _____.
(a) The dependency of the firm on the debt is more
(b) The dependency of the firm on the debt is less
(c) The proportion of equity in the total capital is high
(d) None of the above

4. A company must adhere to the provisions of the Companies Act while taking the dividend decision. Identify the related factor of the dividend decision being mentioned in the above line.
(a) Contractual constraints
(b) Legal constraints
(c) Access to capital market
(d) Preferences of shareholders

5. Which of the following statements is not true?
(a) Increased use of debt increases the financial risk of a business
(b) Increased use of debt decreases the financial risk of a business
(c) Decrease in use of debt increases the financial risk of a business
(d) None of the above

6. If dividend portion of total earnings is high, portion of retained earnings will be
(a) high
(b) low
(c) moderate
(d) equal

7. Which of the following statements is not true?
(a) The cost of debt is higher than the cost of equity
(b) The lender’s risk is lower than the equity shareholder’s risk
(c) The interest paid on debt is treated as a tax-deductible expense
(d) None of the above

8. Financial procedures are determined by
(a) financial planning
(b) financial leverage
(c) financial decisions
(d) capital structure

9. Which of the following is not important in financial planning?
(a) It helps in avoiding business shocks and surprises
(b) It helps in coordinating various business functions
(c) If helps to reduce waste, duplication of efforts, and gaps in the planning
(d) It tries to delink the present with the future

10. Name the process that enables the management to foresee the fund requirements, both the quantum as well as the timing.
(a) Financial management
(b) Capital budgeting decisions
(c) Dividend decision
(d) Financial planning

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