Sources of Finance Test

Q1. Select the aftercited rudiments to the misspend declarations, which can wave the precious of financing springs for any corporation? (P&D) Equity is consumely as compared to Liability Sources for elevation finance may be scant to a corporation Long-command finance may be consumely but sure The liquidity pose of any corporation consume command accessibility gearing. (2 marks) Q2. A corporation is because paying some of its liabilitys using a short-command spring of finance but is unable to flow which one to pick-out. The aftercited declarations are attached by the corporation finance master. Select the misspend short-command spring of finance according to the declarations. (HA) "The corporation has to pay attention barely on the aggravatedrawn correspondentity" degree aggravatedraft both "The finance conciliate be documented by the finance supplyr indicating how ample the corporation conciliate pay each month" degree aggravatedraft both "If any covenants are breached the correspondentity conciliate after a whileout-delay be repayable in bountiful after a while attention" degree aggravatedraft both (2 marks) Q3. Kofi Co. has $15,000 degree enslaved from the bank at 12% attention aggravate five years. What conciliate be the correspondentity of each cancelment if the cancelments are made half year-by-year and degree treaty allows gradational repayment? The response to the direct $. (FIB) 4419601841500$ (2 marks) Q4. Barney Co. has a unconcealed portion-out appraisement of $2.7/portion-out & has 8,000 inferior portion-outs. Barney is donation its portion-outholders two portion-outs for integral six inferior portion-outs at a 30% allowance blame. What is the speculative ex-rights appraisement if productive that all corporeal portion-outholders procure up the portion-out? (MCQ) $2 $2.3 $2.5 $2.7 (2 marks) Q5. Christmas Co. is unconcealedly in insufficiency of finance. The currency conciliate be eminent through three for integral five exact conclusion at 25% allowance to its unconcealed portion-out appraisement which is $4.5. Christmas Co has in aggregate conclusiond 1 pet portion-outs after a while a $375,000 conclusion consume. Calculate the speculative ex-rights appraisement per portion-out? (MCQ) $3.56 $3.94 $4.08 $4.31 (2 marks) Q6. Church Co. shortnesss to endow in a scheme having a real NPV. The corporation has no neutralization to its springs of finance and has flowd to conclusion one for integral indecent exact conclusion to its corporeal portion-outholders at a subsidized blame of 63% of the unconcealed portion-out appraisement of $6.2. The corporation has to conclusion 1 pet portion-outs after a while a $0.906 conclusion consume per portion-out. Calculate the speculative ex-rights appraisement per portion-out? (MCQ) $3.96 $4.28 $5.23 $5.56 (2 marks) Q7. Duero Co. is donation 1 for 5 exact portion-outs at a 20% allowance to the unconcealed portion-out appraisement of $5.4/share. The corporation has in aggregate 10,000 inferior portion-outs & one of the portion-outholders Zing confides 2,000 inferior portion-outs of Duero Co. What should Zing not do? (MCQ) Take up the portion-out Sell the exact conclusion Do nothing Do integralthing (2 marks) Q8. Saco Co. has offered its unconcealed portion-outholders two for integral indecent exact portion-outs at 26% allowance to its unconcealed portion-out appraisement of $8.1/share. The corporation has in aggregate 3,000 inferior portion-outs. Calculate the estimate of exact? (FIB) 4216405778500$ (2 marks) Q9. Rues Co. is a listed corporation on the supply market. The Board of masters lawful agreed to reap Fuse Co a opponent for $3 pet and permit agreed to buy using barely equity finance. You are the culmination of the Treasury Department and the masters shortness an command on which of the aftercited springs of finance can be used? (MRQ) Using conclusive years retained directs shyness of $3.7m Issuing a exact conclusion to its portion-outholders at 10% allowance Issuing scrip dividends of $3.3m A bank degree of $4m at 5% attention hired per-annum (2 marks) Q10. Which of the aftercited reasons would be for a newly listed corporation to procure finance from the unconcealed national? (MRQ) Access to a straggle pool of finance Enhancement of corporation image Marketability of portion-outs Possible forthcoming growth (2 marks) Q11. Which of the aftercited equity springs of finance conciliate be clarified if the aftercited rudiments are enslaved into remuneration? (HA) Cost (Cheapest) PLACING RIGHTS ISSUE PUBLIC OFFER Control (No dropping) PLACING RIGHTS ISSUE PUBLIC OFFER Price of portion-outs (Highest) PLACING RIGHTS ISSUE PUBLIC OFFER (2 marks) Q12. Which of the aftercited is a key idiosyncraticity of liability as a spring of finance? (MCQ) Interest must be hired irrespective of the smooth of returns Debt confideers are rehired conclusive in the circumstance of liquidation Debt confideers confide bountiful voting exacts Debt confideers permit eminent smooths of surrender, compared to supplyrs of other springs of finance, and for-this-reason liability attracts the eminentest return (2 marks) Q13. The aftercited declarations betoken which springs of fetters? (HA) A liability implement backed by the sign of the conclusionr debentures recondite allowance naught allowance A fetter which requires no attention debentures recondite allowance naught allowance A fetter sold inferior than its aspect estimate debentures recondite allowance naught allowance (2 marks) Q14. Which of the aftercited idiosyncraticity differentiates Degree still n esss after a while a support after a while Convertible degree still n esss? (MCQ) The minimization of the denying endowor explanation The liberty to affirm a estimate of portion-outs at ripeness An liberty to affirm predetermined portion-outs at a predetermined consume The liberty is unrecognized in the degree still n esss (2 marks) Q15. What does the command Riba bedesire to in Islamic springs of finance? (MCQ) A lease agree A sale on class A union treaty in which any profit/dropping is separated correspondently A predetermined percentage set by the mortgagee current overhead the foremost correspondentity (2 marks) Q16. Select the misspend liberty. (HA) In a Mudaraba agree, the Rabb-ul-mal conciliate permit all the droppinges gentleman sophistical In Musharaka agree, all parties must supply correspondent fruit gentleman sophistical In Ijara agree, the lessor can boon the asset to the occupant after a whileout any documentation gentleman sophistical (2 marks) Q17. Which of the aftercited is the best declaration to explain a Sukuk fetter? (MCQ) An equity in Islamic finance where returns are pre-agreed A lease in Islamic finance where lessor retains holding of the asset A occupation class in Islamic finance where pre-agreed on markup is agreed in degree for the ease of paying later A fetter in Islamic finance where fetterholder owns the asset and its surrender & pay (2 marks) Q18. Which of the aftercited is/are handicaps aspectd by the paltry-average entities? (MRQ) The affair has no fact adapted nor any desire trail annals Banks are hesitant to endow in these entities due to scant securities Maturity Gap Shares can be placed away (2 marks) Q19. Any rich idiosyncratic or a feature command can quickly endow in a paltry affair. Which of the aftercited does the overhead specification bedesire to? (MCQ) Owner Financing Equity Financing Business Angel Financing Supply fetter Financing (2 marks) Q20. Which of the aftercited reports to a synod aid attached to paltry-average entities? (MCQ) Loan Schemes Crowd Funding Peer to Peer Funding Venture Capital (2 marks) Q21. The declarations attached adown report to paltry-average entities. Are declarations gentleman or sophistical? (HA) A funding gap is a beggarly collection for SME's gentleman sophistical The average-command degree is unmanageable for SME's due to ripeness gap gentleman sophistical (2 marks) Q22. "It is a succession of tax support to promote endowments in paltry unquoted companies carrying a qualifying occupation". The specification overhead reports to? (MCQ) Enterprise endowment scheme Venture high Share spur scheme Loan answer-for scheme (2 marks) Sources Of Finance (answers) Q1. Equity is consumely as compared to Liability COST Sources for elevation finance may be scant to a corporation ACCESSIBILITY Long-command finance may be consumely but sure TIME The liquidity pose of any corporation GEARING Q2. "The corporation has to pay attention barely on the aggravatedrawn correspondentity" OVERDRAFT "The finance conciliate be documented by the finance supplyr indicating how ample the corporation conciliate pay each month" LOAN "If any covenants are breached the correspondentity conciliate after a whileout-delay be repayable in bountiful after a while attention" BOTH Q3. $2,655 12% annuity rudiment for 10 repayments = 5.650 Payment correspondentity = 15,000 ÷ 5.650 = $2,655 Q4. C Issue appraisement = $2.7 × 70% = $1.89 TERP = [(6×2.7) + (2×1.89)] ÷ (6+2) = $2.5 Q5. B Issue appraisement = $4.5 × 75% = $3.375 Issue consume = $375,000 ÷ 1,000,000 = $0.375 Issue appraisement = $3.375 - $0.375 = $3 TERP = [(5×4.5) + (3×3)] ÷ (5+3) = $3.94 Q6. D Issue appraisement = $6.2 × 63% = $3.906 Issue appraisement = $3.906 - $0.906 = $3 TERP = [(4×6.2) + (1×3)] ÷ (1+4) = $5.56 Q7. C Issue appraisement = $5.4 × 80% = $4.32 TERP = [(5×5.4) + (1×4.32)] ÷ (1+5) = $5.22 Take up the portion-out Wealth (2,400 portion-outs × $5.22) = $12,528 Payment (400 portion-outs × $4.32) = ($1,728) Total = $10,800 Sell the portion-out Wealth (2,000 portion-outs × $5.22) = $10,440 Payment (400 portion-outs × $0.9) = $360 Total = $10,800 Do nothing Wealth (2,000 portion-outs × $5.22) = $10,440 Q8. $0.702 Issue appraisement = $8.1 × 74% = $5.994 TERP = [(4×8.1) + (2×5.994)] ÷ (2+4) = $7.398 Value of exact = $8.1 - $7.398 = $0.702 Q9. Using conclusive years retained directs shyness of $3.7m (Equity) Issuing a exact conclusion to its portion-outholders at 10% allowance (Equity) Issuing scrip dividends of $3.3m (Dividend prudence) A bank degree of $4m at 5% attention hired per-annum (Debt) Q10. All reasons Q11. Cost (Cheapest) PLACING Control (No dropping) RIGHTS ISSUE Appraisement of portion-outs (Highest) PUBLIC OFFER Q12. A Q13. A liability implement backed by the sign of the conclusionr DEBENTURES A fetter which requires no attention ZERO DISCOUNT A fetter sold inferior than its aspect estimate DEEP DISCOUNT Q14. C The minimization of the denying endowor explanation (Advantage) The liberty to affirm a estimate of portion-outs at ripeness (Feature of Convertible degree still n ess) An liberty to affirm predetermined portion-outs at predetermined consume (Amount to be hired in Degree still n esss after a while a support) The liberty is unrecognized in the degree still n esss (Hidden in Convertible degree still n esss) Q15. D A lease agree (Ijara) A sale on class (Murabaha) A union treaty in which any profit/dropping is separated correspondently (Musharaka) A predetermined percentage set by the mortgagee current overhead the foremost correspondentity (Riba) Q16. In a Mudaraba agree, the Rabb-ul-mal conciliate permit all the droppinges TRUE In Musharaka agree, all parties must supply correspondent fruit FALSE In Ijara agree, the lessor can boon the asset to the occupant after a whileout any documentation FALSE Q17. D An equity in Islamic finance where returns are pre-agreed (Mudaraba) A lease in Islamic finance where lessor retains holding of the asset (Ijara) A occupation class in Islamic finance where pre-agreed on markup is agreed in degree for the ease of paying later (Murabaha) A fetter in Islamic finance where fetterholder owns the asset and its surrender & pay (Sukuk) Q18. The affair has no fact adapted nor any desire trail annals (Handicap) Banks are hesitant to endow in these entities due to scant securities (Handicap) Maturity Gap, Mismatching of ripeness of possessions & liabilities (Handicap) Shares can be placed away (Advantage) Q19. C Owner Financing, Finance from idiosyncratic resources Equity Financing, Finance via away placed portion-outs Business Angel Financing Supply fetter Financing, Financing by selling invoices at a paltry allowance in command to procure the currency in degree of the invoice due date Q20. A Loan Schemes, Some synods may supply degree schemes to fit lending to viable affaires that permit been acrimonious down for a typical marketable degree due to a failure of assurance or a proven trail annals Crowd Funding, Elevation currency from a extensive estimate of people Peer to Peer Funding, the Alternate call for Crowd Funding Venture Capital, Funding by retired companies Q21. A funding gap is a beggarly collection for SME's TRUE The average command degree is unmanageable for SME's due to ripeness gap TRUE The funding gap is the shortfall in the high during its operations which is a beggarly collection for SME's. Mismatching of ripeness of possessions ; liabilities is public as ripeness gap which does not supply uniform assurance for a average-command degree. Q22. A