A publicly funded school is focused on providing Value for Money
It pays its leaching staff less than other schools, because class sizes are generally smaller
than elsewhere Despite some staff demotivation from low pay, exam pass rates are high
given the close one-to-one attention many pupils receive.
On which aspect of Value for Money is the school underperforming?

A profitable company wishes to dispose of a loss-making division that generated negative free cashflow in the last financial year.
The division requires significant new investment to return it to profitability.
Which of the following valuation approaches is likely to be the most useful to the company
when negotiating the sales price?

A listed company is financed by debt and equity.
If it increases the proportion of debt in its capital structure it would be in danger of
breaching a debt covenant imposed by one of its lenders.
The following data is relevant:

The company now requires $800 million additional funding for a major expansion
programme.
Which of the following is the most appropriate as a source of finance for this expansion
programme?

A listed company plans to raise $350 million to finance a major expansion programme.
The cash flow projections for the programme are subject to considerable variability.
Brief details of the programme have been public knowledge for a few weeks.
The directors are considering two financing options, either a rights issue at a 20% discount
to current share price or a long term bond.
The following data is relevant:

The company's share price has fallen by 5% over the past 3 months compared with a fall in
the market of 3% over the same period.
The directors favour the bond option.
However, the Chief Accountant has provided arguments for a rights issue.
Which TWO of the following arguments in favour of a right issue are correct?

For which THREE of the following risk categories does IFRS 7 require sensitivity analysis?

Company W has received an unwelcome takeover bid from Company B. The offer is a
share exchange of 3 shares in Company B for 5 shares in Company W or a cash
alternative of $5.70 for each Company W share.
Company B is approximately twice the size of Company W based on market capitalisation.
Although the two companies have some common business interested the main aim of the
bid is diversification for Company B.
Company W has substantial cash balances which the directors were planning to use to
fund an acquisition. These plans have not been announced to the market.
The following share price information is relevant.

Which of the following would be the most appropriate action by Company W's directors
following receipt of this hostile bid?

 A company has accumulated a significant amount of excess cash which is not required for
investment for the foreseeable future.
It is currently on deposit, earning negligible returns.
The Board of Directors is considering returning this excess cash to shareholders using a
share repurchase programme.
The majority of shareholders are individuals with small shareholdings.
Which THREE of the following are advantages of the company undertaking a share
repurchase programme? 

 A company's Board of Directors is considering raising a long-term bank loan
incorporating a number of covenants.
The Board members are unsure what loan covenants involve.
Which THREE of the following statements regarding loan covenants are true?