1. Consider the theoretical cost of Debt, Preference Shares and Ordinary Shares, rank them from most expensive to cheapest?

 

2. Recently one of your company directors has attended a finance conference, on their return the director has decided the company should fund all projects with internal source sof financing as they are essentially 'free'. Critically discuss if you agree with this statement. not true because its related to shareholders 

 

3. Discuss whether the company should raise finance (via any means)if it has a project available with a net present value of BD 10million

 

4. Give an example of a type of business which might utilize high leverage (gearing) fully explaining how this would benefit them from a financial management perspective

Answer rating: 100% (QA)

1 Ranking of Cost of Capital Debt Generally debt is considered the cheapest source of financing because interest payments are taxdeductible making the ... View the full answer