Corporate Objectives – NBC Institute

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Question

Leye Limited (LL) is a privately-owned toy manufacturer in Nigeria, operating internationally as both a supplier and a customer. While privately owned, LL’s revenue and asset base are comparable to some publicly listed companies. It has numerous shareholders but has no plans for public listing. Major shareholders have expressed an interest in buying out smaller investors.

LL has a strong history of profitability, which satisfies both directors and shareholders. They avoid strategies that increase risk significantly, such as acquisitions or overseas manufacturing setups, accepting a comparatively lower growth rate than competitors.

The company’s capital structure is composed of 70% equity and 30% debt (based on book values), with debt comprising secured and unsecured bonds carrying interest rates between 7% and 8.5%, maturing in 5 to 10 years. In a low-inflation and potentially declining interest rate environment, the company treasurer is exploring refinancing options.

LL’s primary financial objective is annual dividend growth, with a non-financial objective of treating all stakeholders with fairness and equality. The Board is currently reassessing these objectives. While the new Finance Director advocates for shareholder wealth maximization as the sole objective, other directors favor a balanced approach, including goals such as profit after tax, return on investment, and operational performance improvements.

Required:

a. Evaluate the appropriateness of LL’s current objectives and the Finance Director’s suggestion. Discuss the issues the Board should consider in setting new corporate objectives, concluding with a recommendation. (10 Marks)

b. Discuss factors the treasury department should consider when formulating financing or refinancing strategies in the given economic context. Explain how these factors might influence the determination of corporate objectives. (10 Marks)

Answer

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Topic: Corporate Governance and Financial Strategy

BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions

Identify and explain the four steps of the initial stage of strategy formulation and implementation.

Question

A corporate objective is a purpose or aim that a company is trying to achieve.
Identify and explain the FOUR steps of the initial stage in an extensive process of strategy formulation and implementation. (8 Marks)

Answer

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Tags: Corporate Objectives, Strategic Planning, Strategy Formulation
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2019

FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management

Explains objectives of non-profit organizations, financial markets, and roles of a finance manager.

Question

a) Choosing a corporate objective of a firm is extremely important and has a determinant factor to the success or failure of a corporation in controlling the market.

Required:
Explain FOUR (4) objectives of not-for-profit organizations.
(4 marks)

b) Financial markets are the markets where individuals and organizations lend funds to other individuals and organizations.

Required:
Explain the following under financial markets:

i) Over the counter market (OTC)
ii) Dealers market
iii) Auction market
(6 marks)

c) Identify and explain FOUR (4) essential roles performed by a Finance Manager in order for a corporate body to achieve its objectives.
(10 marks)

Answer

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Tags: Corporate Objectives, Finance Manager Roles, Financial Markets, Non-Profit Organizations
Level: Level 2

Topic: Introduction to Financial Management
Series: NOV 2018

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Question

Required:

Answer

Find Related Questions by Tags, levels, etc.

Topic: Corporate Governance and Financial Strategy

BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions

Identify and explain the four steps of the initial stage of strategy formulation and implementation.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Objectives, Strategic Planning, Strategy Formulation
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2019

FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management

Explains objectives of non-profit organizations, financial markets, and roles of a finance manager.

Question

a) Choosing a corporate objective of a firm is extremely important and has a determinant factor to the success or failure of a corporation in controlling the market.

Required:
Explain FOUR (4) objectives of not-for-profit organizations.
(4 marks)

b) Financial markets are the markets where individuals and organizations lend funds to other individuals and organizations.

Required:
Explain the following under financial markets:

i) Over the counter market (OTC)
ii) Dealers market
iii) Auction market
(6 marks)

c) Identify and explain FOUR (4) essential roles performed by a Finance Manager in order for a corporate body to achieve its objectives.
(10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Objectives, Finance Manager Roles, Financial Markets, Non-Profit Organizations
Level: Level 2

Topic: Introduction to Financial Management
Series: NOV 2018

Question Tag: Corporate Objectives

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FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions

Identify and explain the four steps of the initial stage of strategy formulation and implementation.

FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management

Explains objectives of non-profit organizations, financial markets, and roles of a finance manager.

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions

Identify and explain the four steps of the initial stage of strategy formulation and implementation.

FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management

Explains objectives of non-profit organizations, financial markets, and roles of a finance manager.

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FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

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BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions

Identify and explain the four steps of the initial stage of strategy formulation and implementation.

You're reporting an error for "BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions"

FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management

Explains objectives of non-profit organizations, financial markets, and roles of a finance manager.

You're reporting an error for "FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management"

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

You're reporting an error for "FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy"

BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions

Identify and explain the four steps of the initial stage of strategy formulation and implementation.

You're reporting an error for "BMF – Nov 2019 – L1 – SB – Q2a – Basic Management Functions"

FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management

Explains objectives of non-profit organizations, financial markets, and roles of a finance manager.

You're reporting an error for "FM – NOV 2018 – L2 – Q1 – Introduction to Financial Management"

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