Find Related Questions by Tags, levels, etc.
If the interest rate received on a sinking fund is ……………….., the periodic cost for the sinking fund is lower than that for amortization.
A. Lower than that charged on the debt
B. Equal to that charged on the debt
C. Higher than that charged on the debt
D. Equal to zero
E. Equal to one
Find Related Questions by Tags, levels, etc.
The Ghana Cocoa Board (GCB) is contemplating borrowing one-year funds in anticipation of the coming cocoa season, which starts in September/October 2017. GCB can borrow from the local financial market in Ghana or borrow a portfolio of funds made up of UK pounds and Euros. The information below is the borrowing rates and the probabilities of expected strengthening of the international currencies vis-à-vis the cedi.
Required:
Determine whether GCB should borrow from the local financial market or borrow a portfolio of funds made up of UK pounds and Euros.
Find Related Questions by Tags, levels, etc.
Under conditions of inflation, it is common for interest rates to rise possibly at a rate different from those applicable to goods and services.
Required:
i) Explain TWO possible reasons for this phenomenon.
(3 marks)
ii)
Discuss the implications of high or fluctuating interest rates for:
(Give examples of the types of actions that a company might take)
Find Related Questions by Tags, levels, etc.
Public debt is an important source of revenue for a government to finance public spending where taxation capacity may be limited, or when the alternative would be to print money and compromise macroeconomic stability. There are, however, negative consequences of high public debt on the economy.
Required:
Evaluate FOUR (4) of such negative consequences of public debt on the economy of Ghana.
(4 marks)
Find Related Questions by Tags, levels, etc.
a) Economist has always maintained that to increase inflation, the government ought to implement a policy of high interest rate to dampen demand.
Required:
Identify the effects on the economy of a policy of high interest rate on expenditure and investments.
b) Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government. Organizations try to solve it by instituting measures but no organization can remedy it completely.
Required:
i) What is the agency problem within the context of a limited liability company?
ii) Explain TWO causes of the agency problem.
(2 marks)
iii) Explain FOUR remedies to the agency problem.
(4 marks)
c) For a business, it is not necessary that profit should be the only objective; it may concentrate on various aspects such as maximization of share price, maximization of sales, capturing more market shares, return on capital employed among others, which will take care of profitability.
Required:
Explain why maximization of a company’s share price is preferred as a financial objective to maximization of its sales.
(6 marks)
Find Related Questions by Tags, levels, etc.
Anape Ltd is considering issuing a new 10-year bond in the domestic market. The interest rate on the bond is 20%. Interest will be paid semi-annually. The directors are considering the appropriate price at which the new bonds should be sold. The market required return is 25%.
Required:
(Total: 9 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
If the interest rate received on a sinking fund is ……………….., the periodic cost for the sinking fund is lower than that for amortization.
A. Lower than that charged on the debt
B. Equal to that charged on the debt
C. Higher than that charged on the debt
D. Equal to zero
E. Equal to one
Find Related Questions by Tags, levels, etc.
The Ghana Cocoa Board (GCB) is contemplating borrowing one-year funds in anticipation of the coming cocoa season, which starts in September/October 2017. GCB can borrow from the local financial market in Ghana or borrow a portfolio of funds made up of UK pounds and Euros. The information below is the borrowing rates and the probabilities of expected strengthening of the international currencies vis-à-vis the cedi.
Required:
Determine whether GCB should borrow from the local financial market or borrow a portfolio of funds made up of UK pounds and Euros.
Find Related Questions by Tags, levels, etc.
Under conditions of inflation, it is common for interest rates to rise possibly at a rate different from those applicable to goods and services.
Required:
i) Explain TWO possible reasons for this phenomenon.
(3 marks)
ii)
Discuss the implications of high or fluctuating interest rates for:
(Give examples of the types of actions that a company might take)
Find Related Questions by Tags, levels, etc.
Public debt is an important source of revenue for a government to finance public spending where taxation capacity may be limited, or when the alternative would be to print money and compromise macroeconomic stability. There are, however, negative consequences of high public debt on the economy.
Required:
Evaluate FOUR (4) of such negative consequences of public debt on the economy of Ghana.
(4 marks)
Find Related Questions by Tags, levels, etc.
a) Economist has always maintained that to increase inflation, the government ought to implement a policy of high interest rate to dampen demand.
Required:
Identify the effects on the economy of a policy of high interest rate on expenditure and investments.
b) Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government. Organizations try to solve it by instituting measures but no organization can remedy it completely.
Required:
i) What is the agency problem within the context of a limited liability company?
ii) Explain TWO causes of the agency problem.
(2 marks)
iii) Explain FOUR remedies to the agency problem.
(4 marks)
c) For a business, it is not necessary that profit should be the only objective; it may concentrate on various aspects such as maximization of share price, maximization of sales, capturing more market shares, return on capital employed among others, which will take care of profitability.
Required:
Explain why maximization of a company’s share price is preferred as a financial objective to maximization of its sales.
(6 marks)
Find Related Questions by Tags, levels, etc.
Anape Ltd is considering issuing a new 10-year bond in the domestic market. The interest rate on the bond is 20%. Interest will be paid semi-annually. The directors are considering the appropriate price at which the new bonds should be sold. The market required return is 25%.
Required:
(Total: 9 marks)
Find Related Questions by Tags, levels, etc.
Elevate your professional expertise across key business domains with our comprehensive training programs
Follow us on our social media and get daily updates.
This feature is only available in selected plans.
Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.
If you’re not subscribed to a plan, click on the button below to choose a plan