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100+ Free SIDC Module 12 Practice Questions

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2026 Statistics

Key Facts: SIDC Module 12 Exam

60 questions

SIDC Module 12 has 60 multiple-choice questions

SIDC - SC Licensing Examinations

90 minutes

Time allowed to complete the 60 Module 12 questions

SIDC - Modules Description

70% pass mark

Candidates must score at least 70% (42 of 60) to pass Module 12

SIDC - SC Licensing Examinations

Online MCQ

Module 12 is a computer-based multiple-choice examination

SIDC - SC Licensing Examinations

RM1,250

Per-module SC Licensing Examination fee for FY2026

SIDC - Revised fee structure effective 1 March 2025

120 hours

Minimum study time SIDC estimates for Module 12

SIDC - Module 12 programme

Corporate finance + investment management

Module 12 blends capital budgeting, valuation, M&A and portfolio theory

SIDC - Modules Description

100

Free original practice questions in this bank

OpenExamPrep

SC Licensing Examination Module 12, Investment Management and Corporate Finance, is a Securities Commission Malaysia licensing exam administered by SIDC for people advising on corporate finance and managing funds. It is an online test of 60 multiple-choice questions answered in 90 minutes, with a 70% pass mark, meaning at least 42 correct answers. The syllabus blends corporate finance (capital budgeting, cost of capital, capital structure, valuation, IPOs and M&A under SC and Bursa Malaysia rules) with investment management (risk and return, portfolio theory, the CAPM, asset allocation and performance measurement). SIDC estimates a minimum of about 120 study hours. The per-module fee is RM1,250 in 2026. This 100-question bank provides original practice modelled on the official syllabus.

Sample SIDC Module 12 Practice Questions

Try these sample questions to test your SIDC Module 12 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In modern corporate finance theory, the primary financial objective of a listed company is usually stated as:
A.Maximising accounting profit each year
B.Maximising shareholder wealth
C.Maximising sales revenue
D.Minimising the company's tax bill
Explanation: The widely accepted financial objective of a company is the maximisation of shareholder wealth, normally measured by the long-term value of the firm's shares. Profit, revenue and tax targets are sub-goals that should support, not replace, this objective.
2An agency problem in a company arises mainly because of a conflict of interest between:
A.Customers and suppliers
B.Managers and shareholders
C.The company and the tax authority
D.Ordinary and preference shareholders
Explanation: The classic agency problem is the conflict between managers (agents) and shareholders (principals), who may pursue different objectives such as managers favouring perks or empire-building over shareholder value. Mechanisms such as incentive pay and monitoring aim to reduce these agency costs.
3Working capital is best defined as:
A.Total assets minus total liabilities
B.Current assets minus current liabilities
C.Fixed assets minus depreciation
D.Equity plus long-term debt
Explanation: Net working capital equals current assets minus current liabilities and measures the short-term liquidity available to fund day-to-day operations. Managing it well balances the need for liquidity against the cost of holding idle current assets.
4According to the Modigliani and Miller proposition in a world with no taxes, the value of a firm is:
A.Maximised by using as much debt as possible
B.Independent of its capital structure
C.Maximised by using only equity
D.Equal to its book value of equity
Explanation: Modigliani and Miller's Proposition I (no taxes) states that, under perfect markets, firm value is independent of the mix of debt and equity; capital structure does not affect value. The result highlights that real-world effects such as taxes and bankruptcy costs are what make capital structure matter.
5When corporate taxes are introduced, the Modigliani-Miller model implies that adding debt increases firm value because of:
A.Lower business risk
B.The interest tax shield
C.Higher dividend payments
D.Reduced agency costs
Explanation: With corporate taxes, interest is tax-deductible, creating an interest tax shield that adds value as a firm uses more debt. This is why the MM with-tax model suggests value rises with leverage, before bankruptcy and other costs are considered.
6The trade-off theory of capital structure suggests that an optimal level of debt is reached where:
A.Debt is zero
B.The marginal tax benefit of debt equals the marginal cost of financial distress
C.All earnings are paid as dividends
D.The firm has no equity
Explanation: The trade-off theory balances the tax advantage of debt against the expected costs of financial distress and bankruptcy. The optimal capital structure is where the marginal value of the tax shield just equals the marginal cost of distress.
7Under the pecking order theory, a firm with profitable investment opportunities will prefer to finance them first using:
A.New equity issues
B.Internal funds (retained earnings)
C.Convertible bonds
D.Bank overdrafts
Explanation: The pecking order theory states that, because of information asymmetry, firms prefer internal financing first, then debt, and use new equity only as a last resort. Issuing equity can signal that managers think the shares are overvalued.
8A company has a current ratio of 0.8. This most likely indicates that the company:
A.Has strong short-term liquidity
B.May face difficulty meeting short-term obligations
C.Has no long-term debt
D.Is highly profitable
Explanation: A current ratio below 1.0 means current liabilities exceed current assets, signalling possible difficulty meeting short-term obligations as they fall due. It is a liquidity warning, though interpretation depends on the industry.
9The dividend irrelevance argument of Modigliani and Miller assumes, among other things, that:
A.Taxes on dividends are very high
B.There are no taxes or transaction costs and markets are perfect
C.Investors strongly prefer dividends to capital gains
D.Firms cannot raise external capital
Explanation: MM's dividend irrelevance holds under perfect-market assumptions: no taxes, no transaction costs, and rational investors. Under those conditions, investors can create their own 'homemade' dividends, so the dividend policy itself does not affect firm value.
10A company's return on equity (ROE) can be decomposed using the DuPont identity into net profit margin, total asset turnover and:
A.The equity multiplier (financial leverage)
B.The dividend payout ratio
C.The price-earnings ratio
D.The quick ratio
Explanation: The DuPont identity expresses ROE as net profit margin times total asset turnover times the equity multiplier (assets divided by equity). This separates profitability, efficiency and leverage as the three drivers of ROE.

About the SIDC Module 12 Exam

SC Licensing Examination Module 12, Investment Management and Corporate Finance, is one of the Securities Commission Malaysia licensing examinations administered by the Securities Industry Development Corporation (SIDC). It is required for individuals seeking to be licensed or registered in regulated activities such as advising on corporate finance and fund management. The syllabus covers the investment environment of the Malaysian capital market, financial statement analysis, economic and market value added, the time value of money and opportunity cost of capital, capital budgeting, the relationship between risk and return, market efficiency, security valuation, derivatives used to hedge financial risk, and the financing and investment decisions involved in corporate restructuring, mergers and acquisitions. The examination is online and consists of 60 multiple-choice questions to be answered in 90 minutes, with a passing mark of 70%.

Assessment

The official examination has 60 multiple-choice questions covering corporate finance, capital budgeting and cost of capital, investment management and portfolio theory, security and business valuation, capital raising in the Malaysian market, and corporate restructuring, M&A and derivatives.

Time Limit

90 minutes for 60 multiple-choice questions, an average of about 90 seconds per question.

Passing Score

70% (at least 42 of 60 questions correct).

Exam Fee

Per-module SC Licensing Examination fee: RM1,000 in FY2025, RM1,250 in FY2026 and RM1,500 in FY2027, following the revised fee structure effective 1 March 2025. (Securities Industry Development Corporation (SIDC), on behalf of the Securities Commission Malaysia.)

SIDC Module 12 Exam Content Outline

15%

Corporate Finance Foundations

Financial objectives of the firm and shareholder wealth maximisation, agency relationships and costs, capital structure theories, dividend policy and working capital management in a Malaysian context.

20%

Capital Budgeting and Cost of Capital

Time value of money, opportunity cost of capital, project appraisal using NPV, IRR, payback and profitability index, identifying relevant incremental cash flows, and computing the weighted average cost of capital.

20%

Investment Management and Portfolio Theory

Risk and expected return, standard deviation and beta, diversification and modern portfolio theory, the capital asset pricing model, asset allocation, the three forms of market efficiency and portfolio performance measures such as Sharpe, Treynor and Jensen's alpha.

20%

Security and Business Valuation

Equity valuation using dividend discount and free-cash-flow models, relative valuation with P/E, P/B and EV/EBITDA multiples, bond and sukuk pricing and yields, and economic value added and market value added.

15%

Capital Raising and the Malaysian Market

Structure of the Malaysian capital market, the role of the Securities Commission and Bursa Malaysia, initial public offerings and listing, rights issues, private placements, prospectus and continuing-disclosure obligations and the SC approval process.

10%

Corporate Restructuring, M&A and Derivatives

Mergers, acquisitions and take-overs, the Malaysian Code on Take-Overs and Mergers and mandatory offers, corporate and capital restructuring, due diligence, and the use of forwards, futures, options and swaps to hedge financial risk.

How to Pass the SIDC Module 12 Exam

What You Need to Know

  • Passing score: 70% (at least 42 of 60 questions correct).
  • Assessment: The official examination has 60 multiple-choice questions covering corporate finance, capital budgeting and cost of capital, investment management and portfolio theory, security and business valuation, capital raising in the Malaysian market, and corporate restructuring, M&A and derivatives.
  • Time limit: 90 minutes for 60 multiple-choice questions, an average of about 90 seconds per question.
  • Exam fee: Per-module SC Licensing Examination fee: RM1,000 in FY2025, RM1,250 in FY2026 and RM1,500 in FY2027, following the revised fee structure effective 1 March 2025.

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

SIDC Module 12 Study Tips from Top Performers

1Master the core formulas first: time value of money, NPV and IRR, WACC, the CAPM and the dividend discount model, because Module 12 applies them repeatedly to numerical questions.
2Practise distinguishing NPV from IRR; when they conflict for mutually exclusive projects, NPV is the more reliable decision rule, and many questions test exactly this point.
3Learn the three forms of market efficiency (weak, semi-strong and strong) and which information set each one prices in, as definitional questions appear regularly.
4Know the Malaysian institutions and rules: the Securities Commission, Bursa Malaysia, the Capital Markets and Services Act 2007 and the Malaysian Code on Take-Overs and Mergers, including the 33% mandatory-offer threshold.
5Be comfortable reading and analysing financial statements and ratios, and computing EVA and MVA, since valuation questions build on these inputs.
6Work timed practice sets at about 90 seconds per question so you can finish all 60 questions within the 90-minute limit and still review flagged items.

Frequently Asked Questions

How many questions are on SIDC Module 12 and how long is the exam?

The Module 12 examination has 60 multiple-choice questions and you are given 90 minutes to complete them, which is about 90 seconds per question.

What is the passing mark for SIDC Module 12?

The passing mark is 70%. With 60 questions, you must answer at least 42 questions correctly to pass the examination.

What does Module 12 cover?

It covers investment management and corporate finance: capital budgeting and cost of capital, capital structure, security and business valuation, portfolio theory and the CAPM, market efficiency, capital raising and listing in Malaysia, and corporate restructuring, mergers and acquisitions.

Who administers the SC Licensing Examination Module 12?

The examination is administered by the Securities Industry Development Corporation (SIDC) on behalf of the Securities Commission Malaysia. It is delivered online as a computer-based multiple-choice test.

How much does Module 12 cost?

Following the fee revision effective 1 March 2025, the per-module fee is RM1,000 in FY2025, RM1,250 in FY2026 and RM1,500 in FY2027. Check SIDC for the current fee before registering.

How long should I study for Module 12?

SIDC estimates a minimum of about 120 hours of study, though the time needed depends on your education background and work experience in finance and the capital market.