NTA UGC NET/JRF Exam, September 2024 (Commerce)

Total Questions: 100

51. Which of the following means management should promote a team-spirit of unity and harmony among employees?

Correct Answer: D. Esprit De Corps
Solution:The term "Espirit refers to De Corps" the management principle that emphasizes promoting a team spirit of unity and harmony among employees. This principle is based on fostering a positive work environment where teamwork and mutual respect are highly valued.

Encouraging espirit de corps helps in building strong relationships among employees, which is crucial for maintaining morale, enhancing cooperation, and achieving organizational goals effectively. By promoting a sense of solidarity, management can ensure that employees feel part of a cohesive group, leading to better communication, reduced conflicts, and increased productivity.

52. Which of the following are the rights of the equity shareholders?

(a) Right to Income
(b) Right to claim Dividend
(c) Right to Control
(d) Right to Liquidation
(e) Pre-emptive Rights
Choose the correct answer from the options given below:

Correct Answer: D. (a), (c), (d) & (e) only
Solution:Equity shareholders typically enjoy several fundamental rights associated with their investment in a company. These rights include:
(a) Right to Income: Equity shareholders have the right to share in the profits of the company, typically in the form of dividends.
(c) Right to Control: Equity shareholders often have voting rights that allow them to influence the management and major decisions of the company, such as electing directors.
(d)  Right to Liquidation: In the event of the company's liquidation, after settling all debts, equity shareholders have a claim over the remaining assets of the company.
(e) Pre-emptive Rights: Shareholders may have pre-emptive rights to purchase new shares issued by the company, which helps them maintain their proportional ownership. This combination of rights ensures that equity shareholders can benefit financially from the company's success, participate in its governance, and protect their investment interests.

53. Tax treaties are generally based on which of the following convention?

(a) OECD Model Tax Convention
(b) UN Model Tax Convention
(c) WTO Model Tax Convention
(d) IMF Model Tax Convention
Choose the correct answer from the options given below:

Correct Answer: A. (a) & (b) only
Solution:Тax treaties are international agreements designed to avoid double taxation and prevent tax evasion, enhancing economic cooperation between countries. The most commonly referenced models for these treaties are:
(a) OECD Model Tax Convention: Developed by the Organisation for Economic Co-operation and Development, this model serves as a framework for bilateral tax treaties between developed nations, aiming to promote consistent and fair tax practices.
(b) UN Model Tax Convention: This model, provided by the United Nations, is similar to the OECD's but includes provisions that are particularly relevant to developing countries, recognizing their specific needs and economic circumstances. Both these models are influential in shaping tax treaties worldwide, providing a basis for negotiations and helping countries to draft agreements that reflect their economic and fiscal environments.

54. An appeal that elaborate on a non-product related benefit or image and attempts to induce emotional responses from consumers is called:

Correct Answer: D. Transformational Appeal
Solution:Transformational appeal in advertising refers to a technique that focuses on the non-product related benefits or images associated with a product or service, which attempts to evoke emotional responses from consumers. This type of appeal seeks to transform the consumer's perception by associating the product with desirable qualities or lifestyles, suggesting that using the product will enhance their life in some way.

Transformational appeals are often used in branding and marketing strategies to create a strong, memorable image that resonates on an emotional level, influencing consumer behaviour more deeply than just the functional attributes of the product.

55. Calculate Debt Service coverage ratio from the following data.

Net profit before interest and Tax 50,000 10% Debenture (payable in 10 years in equal instalments) 1,00,000
Tax rate is 50%

Correct Answer: B. 1.67

56. Which of the following are included in Foreign Direct Investment?

(a) Wholly owned subsidiary
(b) Joint venture
(c) Investment in GDR
(d) Acquisition
(e) Investment by FIIs
Choose the correct answer from the options given below:

Correct Answer: D. (a), (b) & (d) only
Solution:Foreign Direct Investment (FDI) involves investment made by a company or individual in one country in business interests located in another country, typically in the form of either establishing business operations or acquiring business assets in the foreign country. The types of investments that are commonly included in FDI are:
(a) Wholly owned subsidiary: This involves a parent company owning 100% of the company's stock, thereby fully controlling the subsidiary in another country.
(b) Joint venture: Here, the foreign investor partners with local companies or other foreign entities to create a new company together, sharing resources, risks, and profits.
(c) Acquisition: This includes acquiring a controlling interest in a foreign company, where the foreign investor buys enough shares in a foreign company to manage and control it. Investments such as Global Depository Receipts (GDR) (c) and investments by Foreign Institutional Investors (FIIs) (e) are generally classified under portfolio investments rather than direct investments because they do not confer management control.

57. The price of one kg of tea is30. At this price ₹5 kg of tea is demanded. If the price of coffee rises from25 to 35 per kg, the quantity demanded of tea rises from 5 kg to 8 kg. Find the cross price elasticity of tea.

Correct Answer: C. (+) 1.5
Solution:To calculate the cross-price elasticity of tea with respect to the price of coffee, we use the formula for cross-price elasticity of demand, which is the percentage change in quantity demanded of one good divided by the percentage change in price of another good. The formula and values are:Thus, the cross-price elasticity of tea with respect to coffee is 1.5, indicating that a 1% increase in the price of coffee results in a 1.5% increase in the quantity demanded of tea.

58. According to Dividend Growth Model, the cost of Equity is equal to:

Correct Answer: B. Dividend yield + Expected Growth in Dividend
Solution:According to the Dividend Growth Model (also known as the Gordon Growth  Model), the cost of equity can be estimated using the dividend yield plus the expected growth rate in dividends.This model posits that the current price of a stock is equal to the present value of all future dividends it will pay, which are assumed to grow at a constant rate indefinitely. The formula to estimate the cost of equity is:
Where r is the cost of equity, D is the expected dividend per share one year from now, Po is the current price per share, and g is the growth rate in dividends. This formula captures both the immediate income from dividends relative to the price of the stock (dividend yield) and the value of future growth in these dividends.

59. What is the valuation formula based on the Walter's model if

P: Price per equity share
D: Dividend per share
E: Earnings per share
r: Rate of return on investment
k : Cost of equity

Correct Answer: C.

60. In the context of an organisation, the process of making subordinates to act in a desired manner to achieve certain organisational goals is known as:

Correct Answer: D. Motivation
Solution:In the context of an organization, the process of making subordinates act in a desired manner to achieve certain organizational goals is known as motivation. Motivation involves the set of processes that arouse, direct, and maintain human behaviour towards attaining some goal. It's essential for managers to understand what drives their employees to perform effectively and to use this knowledge to encourage them to work towards the organization's objectives.

Motivation can stem from internal factors like personal satisfaction and achievement or from external factors such as incentives, recognition, and rewards. Effective motivation strategies can enhance productivity, improve workplace morale, and reduce turnover, thereby contributing significantly to the success of the organization.