- 10 Marks
SCS – Nov 2019 – L3 – Q2b – Capital structure
Discuss the potential benefits and problems of converting short-term borrowing into long-term loans.
Question
i) Discuss the potential benefits and problems with proposals to convert the company’s short-term borrowings into a longer-term loan.
ii) Pay bigger cash salaries, or add a share option element to the remuneration packages.
iii) Maintain the dividend for 2019 at the 2018 level, or even reduce it further.
iv) Convert any surplus dollar cash into cedis.
(10 marks)
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