Sources of Finance Test

Q1. Select the forthcoming contents to the embezzle announcements, which can bias the excellent of financing springs for any concourse? (P&D) Equity is extravagant as compared to Obligation Sources for elevation finance may be scant to a concourse Long-message finance may be extravagant but trustworthy The liquidity situation of any concourse absorb span accessibility gearing. (2 marks) Q2. A concourse is regarding paying some of its obligations using a short-message spring of finance but is unable to flow which one to cull. The forthcoming announcements are dedicated by the concourse finance controller. Select the embezzle short-message spring of finance according to the announcements. (HA) "The concourse has to pay attention singly on the aggravatedrawn aggregate" mortgage aggravatedraft both "The finance achieve be documented by the finance arranger indicating how ample the concourse achieve pay each month" mortgage aggravatedraft both "If any covenants are breached the aggregate achieve after a whileout-delay be repayable in generous after a while attention" mortgage aggravatedraft both (2 marks) Q3. Kofi Co. has $15,000 mortgage captured from the bank at 12% attention aggravate five years. What achieve be the aggregate of each cancelment if the cancelments are made half integral-year and mortgage bargain allows unintermittent retribution? The repartee to the direct $. (FIB) 4419601841500$ (2 marks) Q4. Barney Co. has a vulgar portion-out compensation of $2.7/portion-out & has 8,000 plain portion-outs. Barney is aid its portion-outholders two portion-outs for integral six plain portion-outs at a 30% abatement admonish. What is the presumptive ex-rights compensation if antecedent that all bulky portion-outholders siege up the portion-out? (MCQ) $2 $2.3 $2.5 $2.7 (2 marks) Q5. Christmas Co. is vulgarly in scarcity of finance. The coin achieve be influential through three for integral five upupupproper outcome at 25% abatement to its vulgar portion-out compensation which is $4.5. Christmas Co has in aggregate outcomed 1 favorite portion-outs after a while a $375,000 outcome absorb. Calculate the presumptive ex-rights compensation per portion-out? (MCQ) $3.56 $3.94 $4.08 $4.31 (2 marks) Q6. Church Co. absences to endow in a scheme having a enacted NPV. The concourse has no neutralization to its springs of finance and has flowd to outcome one for integral disgusting upupupproper outcome to its bulky portion-outholders at a subsidized admonish of 63% of the vulgar portion-out compensation of $6.2. The concourse has to outcome 1 favorite portion-outs after a while a $0.906 outcome absorb per portion-out. Calculate the presumptive ex-rights compensation per portion-out? (MCQ) $3.96 $4.28 $5.23 $5.56 (2 marks) Q7. Duero Co. is aid 1 for 5 upupupproper portion-outs at a 20% abatement to the vulgar portion-out compensation of $5.4/share. The concourse has in aggregate 10,000 plain portion-outs & one of the portion-outholders Zing halts 2,000 plain portion-outs of Duero Co. What should Zing not do? (MCQ) Take up the portion-out Sell the upupupproper outcome Do nothing Do integralthing (2 marks) Q8. Saco Co. has offered its vulgar portion-outholders two for integral disgusting upupupproper portion-outs at 26% abatement to its vulgar portion-out compensation of $8.1/share. The concourse has in aggregate 3,000 plain portion-outs. Calculate the estimate of upright? (FIB) 4216405778500$ (2 marks) Q9. Rues Co. is a listed concourse on the supply dispense. The Board of controllers honorable agreed to profit Fuse Co a opponent for $3 favorite and possess agreed to buy using singly equity finance. You are the summit of the Treasury Department and the controllers absence an information on which of the forthcoming springs of finance can be used? (MRQ) Using decisive years retained propers retention of $3.7m Issuing a upupupproper outcome to its portion-outholders at 10% abatement Issuing scrip dividends of $3.3m A bank mortgage of $4m at 5% attention hired year-by-year (2 marks) Q10. Which of the forthcoming reasons would be for a newly listed concourse to achieve finance from the open exoteric? (MRQ) Access to a straggle pool of finance Enhancement of concourse image Marketability of portion-outs Possible forthcoming growth (2 marks) Q11. Which of the forthcoming equity springs of finance achieve be selected if the forthcoming contents are captured into remuneration? (HA) Cost (Cheapest) PLACING RIGHTS ISSUE PUBLIC OFFER Control (No detriment) PLACING RIGHTS ISSUE PUBLIC OFFER Price of portion-outs (Highest) PLACING RIGHTS ISSUE PUBLIC OFFER (2 marks) Q12. Which of the forthcoming is a key mark of obligation as a spring of finance? (MCQ) Interest must be hired irrespective of the raze of receipts Debt halters are rehired decisive in the fact of liquidation Debt halters halt generous voting uprights Debt halters possess proud razes of occasion, compared to arrangers of other springs of finance, and hence obligation attracts the proudest return (2 marks) Q13. The forthcoming announcements manifest which springs of obligations? (HA) A obligation deed backed by the mark of the outcomer debentures intense abatement cipher abatement A obligation which requires no attention debentures intense abatement cipher abatement A obligation sold inferior than its aspect estimate debentures intense abatement cipher abatement (2 marks) Q14. Which of the forthcoming singularity differentiates Mortgage voices after a while a undertake after a while Convertible mortgage voices? (MCQ) The minimization of the privative endowor explanation The liberty to assent a calculate of portion-outs at ripeness An liberty to assent predetermined portion-outs at a predetermined absorb The liberty is obscure in the mortgage voices (2 marks) Q15. What does the message Riba rehearse to in Islamic springs of finance? (MCQ) A lease abridge A sale on confidence A joint-cause bargain in which any profit/detriment is disconnected similarly A predetermined percentage set by the mortgagee current aloft the pre-eminent aggregate (2 marks) Q16. Select the embezzle liberty. (HA) In a Mudaraba abridge, the Rabb-ul-mal achieve suffer all the detrimentes gentleman fabrication In Musharaka abridge, all parties must arrange similar toil gentleman fabrication In Ijara abridge, the lessor can endowment the asset to the dweller after a whileout any documentation gentleman fabrication (2 marks) Q17. Which of the forthcoming is the best announcement to define a Sukuk obligation? (MCQ) An equity in Islamic finance where receipts are pre-agreed A lease in Islamic finance where lessor retains tenure of the asset A occupation confidence in Islamic finance where pre-agreed on markup is agreed in mark for the quiet of paying following A obligation in Islamic finance where obligationholder owns the asset and its occasion & recompense (2 marks) Q18. Which of the forthcoming is/are handicaps aspectd by the paltry-medium entities? (MRQ) The employment has no fact advantageous nor any crave mark annals Banks are hesitant to endow in these entities due to scant securities Maturity Gap Shares can be placed separate (2 marks) Q19. Any monied specific or a point collocation can immediately endow in a paltry employment. Which of the forthcoming does the aloft determination becrave to? (MCQ) Owner Financing Equity Financing Business Angel Financing Supply carelessness Financing (2 marks) Q20. Which of the forthcoming rehearses to a legislation aid dedicated to paltry-medium entities? (MCQ) Loan Schemes Crowd Funding Peer to Peer Funding Venture Capital (2 marks) Q21. The announcements dedicated underneath rehearse to paltry-medium entities. Are announcements gentleman or fabrication? (HA) A funding gap is a beggarly whole for SME's gentleman fabrication The medium-message mortgage is after a whileholdingd for SME's due to ripeness gap gentleman fabrication (2 marks) Q22. "It is a course of tax holp to aid endowments in paltry unquoted companies carrying a qualifying occupation". The determination aloft rehearses to? (MCQ) Enterprise endowment scheme Venture cardinal Share stimulus scheme Loan insure scheme (2 marks) Sources Of Finance (answers) Q1. Equity is extravagant as compared to Obligation COST Sources for elevation finance may be scant to a concourse ACCESSIBILITY Long-message finance may be extravagant but trustworthy TIME The liquidity situation of any concourse GEARING Q2. "The concourse has to pay attention singly on the aggravatedrawn aggregate" OVERDRAFT "The finance achieve be documented by the finance arranger indicating how ample the concourse achieve pay each month" LOAN "If any covenants are breached the aggregate achieve after a whileout-delay be repayable in generous after a while attention" BOTH Q3. $2,655 12% annuity content for 10 retributions = 5.650 Payment aggregate = 15,000 ÷ 5.650 = $2,655 Q4. C Issue compensation = $2.7 × 70% = $1.89 TERP = [(6×2.7) + (2×1.89)] ÷ (6+2) = $2.5 Q5. B Issue compensation = $4.5 × 75% = $3.375 Issue absorb = $375,000 ÷ 1,000,000 = $0.375 Issue compensation = $3.375 - $0.375 = $3 TERP = [(5×4.5) + (3×3)] ÷ (5+3) = $3.94 Q6. D Issue compensation = $6.2 × 63% = $3.906 Issue compensation = $3.906 - $0.906 = $3 TERP = [(4×6.2) + (1×3)] ÷ (1+4) = $5.56 Q7. C Issue compensation = $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 compensation = $8.1 × 74% = $5.994 TERP = [(4×8.1) + (2×5.994)] ÷ (2+4) = $7.398 Value of upupupproper = $8.1 - $7.398 = $0.702 Q9. Using decisive years retained propers retention of $3.7m (Equity) Issuing a upupupproper outcome to its portion-outholders at 10% abatement (Equity) Issuing scrip dividends of $3.3m (Dividend system) A bank mortgage of $4m at 5% attention hired year-by-year (Debt) Q10. All reasons Q11. Cost (Cheapest) PLACING Control (No detriment) RIGHTS ISSUE Compensation of portion-outs (Highest) PUBLIC OFFER Q12. A Q13. A obligation deed backed by the mark of the outcomer DEBENTURES A obligation which requires no attention ZERO DISCOUNT A obligation sold inferior than its aspect estimate DEEP DISCOUNT Q14. C The minimization of the privative endowor explanation (Advantage) The liberty to assent a calculate of portion-outs at ripeness (Feature of Convertible mortgage voice) An liberty to assent predetermined portion-outs at predetermined absorb (Amount to be hired in Mortgage voices after a while a undertake) The liberty is obscure in the mortgage voices (Hidden in Convertible mortgage voices) Q15. D A lease abridge (Ijara) A sale on confidence (Murabaha) A joint-cause bargain in which any profit/detriment is disconnected similarly (Musharaka) A predetermined percentage set by the mortgagee current aloft the pre-eminent aggregate (Riba) Q16. In a Mudaraba abridge, the Rabb-ul-mal achieve suffer all the detrimentes TRUE In Musharaka abridge, all parties must arrange similar toil FALSE In Ijara abridge, the lessor can endowment the asset to the dweller after a whileout any documentation FALSE Q17. D An equity in Islamic finance where receipts are pre-agreed (Mudaraba) A lease in Islamic finance where lessor retains tenure of the asset (Ijara) A occupation confidence in Islamic finance where pre-agreed on markup is agreed in mark for the quiet of paying following (Murabaha) A obligation in Islamic finance where obligationholder owns the asset and its occasion & recompense (Sukuk) Q18. The employment has no fact advantageous nor any crave mark 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 separate (Advantage) Q19. C Owner Financing, Finance from peculiar resources Equity Financing, Finance via separate placed portion-outs Business Angel Financing Supply carelessness Financing, Financing by selling invoices at a paltry abatement in direct to achieve the coin in mark of the invoice due date Q20. A Loan Schemes, Some legislations may arrange mortgage schemes to dispose lending to viable employmentes that possess been acrimonious down for a usual retail mortgage due to a failure of carelessness or a proven mark annals Crowd Funding, Elevation coin from a abundant calculate of people Peer to Peer Funding, the Alternate spectry for Crowd Funding Venture Capital, Funding by special companies Q21. A funding gap is a beggarly whole for SME's TRUE The medium message mortgage is after a whileholdingd for SME's due to ripeness gap TRUE The funding gap is the shortfall in the cardinal during its operations which is a beggarly whole for SME's. Mismatching of ripeness of possessions ; liabilities is known as ripeness gap which does not arrange proper carelessness for a medium-message mortgage. Q22. A