LPM Company is based in Country C. whose currency is the CS
It has entered Into a contract to buy a machine in three months' time. The supplier is overseas and the payment is to be made in a different currency from the CS The treasurer at LPM Company is considering using a money market hedge to manage the transaction risk associated with a payment.
The assumptions of interest rate parity apply
Which THREE of the following statements concerning the use of a money market hedge for this supplier payment are correct*?

• A.It can be tailored to match the size of the payment
• B.It manages transaction risk
• C.Any opportunity to benefit from future exchange rate movements is lost.
• D.It offers a significantly better outcome than a forward contract
• E.lt avoids the need to find immediate finance

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A listed company follows a policy of paying a constant dividend. The following information is available:
* Issued share capital (nominal value $0.50) $60 million
* Current market capitalisation $480 million
The shareholders are requesting an increased dividend this year as earnings have been growing. However, the directors wish to retain as much cash as possible to fund new investments. They therefore plan to announce a
1-for-10 scrip dividend to replace the usual cash dividend.
Assuming no other influence on share price, what is the expected share price following the scrip dividend?
Give your answer to 2 decimal places.
$ ?

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An aerospace company is planning to diversify into car manufacturing.
Relevant data:
What is the the cost of equity to be used in the WACC for the project appraisal?
Give your answer in percentage, as a whole number.
? %

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The competition authorities are investigating the takeover of Company Z by a larger company, Company
Y.
Both companies are food retailers.
The takeover terms involve using a part cash, part share exchange means of payment.
Company Z is resisting the bid, arguing that it undervalues its business, while lobbying extensively among politicians to sway public opinion against the bidder.
Which of the following actions by Company Y is most likely to persuade the competition authorities to approve the acquisition?

• A.Company Y increases the cash element of its bid offer.
• B.Company Y undertakes to pass on any cost savings to customers.
• C.Company Y agrees to dispose of specified outlets which geographically overlap those of Company Z.
• D.Company Y guarantees to preserve employment at its cental distribution depot.

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Which of the following explains an aim of integrated reporting in accordance with The International <IR> Framework as issued by the International Integrated Reporting Council?

• A.To highlight the need for greater reporting of performance to stakeholders in a greater level of detail than at present.
• B.To highlight the separation of strategy, governance and financial performance in a social, environmental and economic context.
• C.To integrate the various accepted accounting practices of member bodies into a single, unified code of accounting principles.
• D.To support decision making and actions that focus on creating value over the short, medium and long term.

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