Questions from Financial Management

Q: Newtake Records Ltd owns three shops selling rare jazz and classical recordings

Newtake Records Ltd owns three shops selling rare jazz and classical recordings to serious collectors. At the beginning of June, the business had an overdraft of £35,000 and the bank has...

Q: The following listed businesses each have different policies concerning distributions to shareholders

The following listed businesses each have different policies concerning distributions to shareholders: ■ North plc pays all profits available for distribution to shareholders in the form of a cash div...

Q: Mondrian plc is a new business that aims to maximize the wealth

Mondrian plc is a new business that aims to maximize the wealth of its shareholders. The board of directors is currently trying to decide upon the most appropriate dividend policy to adopt for the bus...

Q: The chief executive officer of Spark rite Ltd, a trading business

The chief executive officer of Spark rite Ltd, a trading business, has just received summary sets of financial statements for last year and this year: Income statements for years ended 30 September...

Q: International Electric plc at present offers its customers 30 days’ credit.

International Electric plc at present offers its customers 30 days’ credit. Half of the customers, by value, pay on time. The other half takes an average of 70 days to pay. The business is considering...

Q: Goliath plc is a food wholesaler. The most recent financial statements

Goliath plc is a food wholesaler. The most recent financial statements of the business are as follows: Income statement for the year to 31 May Income statement for the year to 31 May (continued)...

Q: Advocates of the shareholder value approach argue that, by delivering consistent

Advocates of the shareholder value approach argue that, by delivering consistent and sustainable improvements in shareholder value, a business will benefit several stakeholder groups. The performance...

Q: Aries plc was recently formed and issued 80 million £0.

Aries plc was recently formed and issued 80 million £0.50 shares at nominal value and loan capital of £24 million. The business used the proceeds from the capital issues to purchase the remaining leas...

Q: Leo plc is considering entering a new market. A new product

Leo plc is considering entering a new market. A new product has been developed at a cost of £5 million and is now ready for production. The market is growing and estimates from the finance department...

Q: When a business wishes to acquire another, it may make a

When a business wishes to acquire another, it may make a bid in the form of cash, a share-for-share exchange, or loan capital-for-share exchange. Required: Discuss the advantages and disadvantages of...