Part B (structured question) (Total : 20 marks)

1. Give 4 reason as why ordinary shares are a better form of investment compared to preference shares (8 marks)
2. Although payback period is not the best investment appraisal technique, investors still frequently uses it. Give 2 reasons as to why investors still uses payback period when making decisions. (2 marks)
3. Shares are issued by companies to raise capital. How does a good stock market help companies to raise capital? (6 marks)
4. What are 2 advantages and 2 disadvantages of the Internal rate of return method? (4 marks)