Dividend-concept(Auditing ) Questions and answers for exam Preparation

Question 1. “A bird in hand is better than two in the bush” principle related to which theory of dividend?

Walter J.E.
Miller M and Modigliani F. theory
Gordon’s Model
Residual theory of dividend

Explanation:-

Answer: Option C. -> Gordon’s Model

Question 2. “Residual theory of dividend” is introduced by ?

Lintner J
Walter
Gordon
Miller M

Explanation:-

Answer: Option A. -> Lintner J

Question 3. Relevance of dividend theory propounded by

Miller M and Modigliani F
Lintner J
Walter J.E.
Gordon

Explanation:-

Answer: Option C. -> Walter J.E.

Question 4. “Residual theory of dividend” introduce in the year ?

1936
1946
1956
1966

Explanation:-

Answer: Option C. -> 1956

Question 5. The main decision criterion in dividend decision is

Maximization of national income
Maximization of shareholders wealth
Maximization of profit
None of the above

Explanation:-

Answer: Option B. -> Maximization of shareholders wealth

Question 6. Who propounded the irrelevance theory of dividend?

Miller M and Modigliani F.
Lintner J.
Walter
Gordon

Explanation:-

Answer: Option A. -> Miller M and Modigliani F.

Question 7. Irrelevance theory of dividend introduced in the year ?

1951
1961
1971
1981

Explanation:-

Answer: Option B. -> 1961

Question 8. What us operational justification of Modigliani approach to irrelevance of dividend?

Agency problem
Insider trading
Arbitrage
None of the above

Explanation:-

Answer: Option C. -> Arbitrage

Question 9. The residual theory of dividend advocated the……..of dividend to the valuation of an entity

Relevance
Irrelevance
Both
None of the above

Explanation:-

Answer: Option B. -> Irrelevance

Question 10. The walter’s model and Gordan’s Model advocate the

Irrelevance of dividend
Relevance of dividend
Both
None of the above

Explanation:-

Answer: Option B. -> Relevance of dividend