Question 1
For any company that is quoted on London Stock Market, you are required to write down a report to existing shareholders.
a) Critically calculate the company’s financing policy, with particular reference to its gearing.
b) Evaluate the company’s policy on the international activity and finance. Include in your answer how the company currently treats international issues, and make suitable recommendations as to the validity of its approach.
c) Discuss the dividend strategy adopted by your chosen company and critically evaluates this in the light of theories on dividend policy.
d) Measure whether in the light of the current financial and economic environment your chosen company is more concerned with shareholder value than any other type of stakeholder.
e) Consider whether your chosen company would make a good takeover target. Justify any recommendations you make.
f) Measure the liquidity and solvency of your selected company, discussing as appropriate any trends identified over the last few years.
Additionally this might include consideration of short term cash flows.
Question 2
Investigate a recent company merger or take-over and:
i) Critically measure the means by which managers may determine the bid price in such acquisitions. (You should use the benefits anticipated from the merger/takeover chosen to illustrate your explanation).
ii) Assess the implications of deal for shareholders.
iii) Discuss probable reasons for the merger / take-over failing to deliver the benefits anticipated.