Questions from Financial Management


Q: Gainsborough Fashions Ltd operates a chain of fashion shops. In recent

Gainsborough Fashions Ltd operates a chain of fashion shops. In recent months the business has been under pressure from its suppliers to reduce the average credit period taken from three months to one...

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Q: Provide two reasons why: (a) Tax incentives may

Provide two reasons why: (a) Tax incentives may have only limited value in stimulating greater investment by business angels. (b) Business angels can be an attractive source of finance to entrepreneur...

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Q: Pizza Shack plc operates a chain of pizza restaurants. The business

Pizza Shack plc operates a chain of pizza restaurants. The business started operations five years ago and has enjoyed uninterrupted and rapid growth. The directors, however, believe that future growth...

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Q: The board of directors of Wicklow plc is considering an expansion of

The board of directors of Wicklow plc is considering an expansion of production capacity following an increase in sales over the past two years. The most recent financial statements for the business a...

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Q: Devonian plc has the following long-term capital structure as at

Devonian plc has the following long-term capital structure as at 30 November Year 4: £m Ordinary shares 25p fully paid......... 50.0 General reserve.................................22.5 Retained...

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Q: Riphean plc and Silurian plc are two businesses operating in different industries

Riphean plc and Silurian plc are two businesses operating in different industries. They are both financed by a mixture of ordinary share and loan capital and both are seeking to derive the cost of cap...

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Q: Consider each of the following: ■ Mallard plc issues loan

Consider each of the following: ■ Mallard plc issues loan capital with a nominal value of £100 million at a price of £90 per £100 nominal value. The annual interest rate is 10 per cent of the nominal...

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Q: Trexon plc is a major oil and gas exploration business that has

Trexon plc is a major oil and gas exploration business that has most of its operations in the Middle East and South-East Asia. Recently, the business acquired rights to explore for oil and gas in the...

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Q: Hatleigh plc is an engineering business. The financial statements for the

Hatleigh plc is an engineering business. The financial statements for the year ended 30 April Year 8 are as follows: Statement of financial position as at 30 April Year 8 £000 ASSETS Non-cur...

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Q: The dividend policy of businesses has been the subject of much debate

The dividend policy of businesses has been the subject of much debate in the financial management literature. Required: Discuss the view that the pattern of dividend can increase the wealth of shareh...

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