Holding cash in excess of business requirements rather than returning the cash to shareholders is most likely to result in lower:

• A.net profit.
• B.liquidity.
• C.vulnerability to a takeover bid.
• D.return on equity.

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Company WWW is identical in all operating and risk characteristics to Company ZZZ. but their capital structures differ. Company WWW and Company ZZZ both pay corporate income tax at 20%
Company WWW has a gearing ratio (debt: equity) of 1:3 Its pre-tax cost of debt is 6%.
Company ZZZ Is all-equity financed. Its cost of equity is 15%
What is the cost of equity tor Company WWW?

• A.17.7%
• B.18.0%
• C.17.4%
• D.17.0%

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Company A is planning to acquire Company B.
Company A's managers think they can improve the performance of Company B to the extent that its own P/E ratio should be applied to Company B's earnings.
Relevant Data:

What is the expected synergy if the acquisition goes ahead?
Give your answer to the nearest $ million.
$ ? million

• A.8, 8000000
• B.7, 8000000

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A company is located in a single country. The company manufactures electncal goods for export and for sale in its home country. When exporting, it invoices in its customers' currency. What currency risks is the company exposed to?

• A.Transaction, economic and translation risks.
• B.Transaction and economic risks
• C.Translation and economic risks.
• D.Transaction risk only

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G purchased a put option that grants the right to cap the interest on a loan at 10.0%. Simultaneously, G sold a call option that grants the holder the benefits of any decrease if interest rates fall below 8.5%.
Which THREE possible s would be consistent with G's behavior?

• A.G is concerned that interest rates may rise above 10.0%.
• B.G is concerned that interest rates may fall below 10%.
• C.G is concerned that interest rates may rise above 8.5%.
• D.G is willing to risk the loss of savings from a fall in interest rates if that offsets the cost of limiting the cost of rises.
• E.G's strategy is to ensure that its interest rates lie between 8.5% and 10.0%.

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