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Question $6$

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Select the combination of the following considerations that are all TRUE when an organisation needs to raise long$-$term capital.

$(1)$ Debt holders run the highest risk of their capital not being repaid.

$(2)$ Debt tends to have a finite life while equity tends to be part of the organisation for life.

$(3)$ Equity financing is relatively more expensive than debt financing.

$(4)$ Holders of ordinary shares do not control the organisation as they have no voting rights.

$(5)$ Interest payable on debt is deductible as a business expense for normal tax purposes.

$($a$)$ Statements $(1),(3)$ and $(5)$

$($b$)$ Statements $(1),(2)$ and $(5)$

$($c$)$ Statements $(2),(3)$ and $(5)$

$($d$)$ Statements $(2),(3)$ and $(4)$

Select one:

a$.$

Statements $(2),(3)$ and $(4)$

b$.$

Statements $(1),(3)$ and $(5)$

c$.$

Statements $(2),(3)$ and $(5)$

d$.$

Statements $(1),(2)$ and $(5)$

Question $7$

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Select all methods from the following list, that are regarded as capital allocation methods?

$(1)$ Mergers and Acquisitions

$(2)$ Repurchasing shares

$(3)$ Paying out dividends

$(4)$ Organic growth investment

$($a$)$ Statements $(1),(2)$ and $(3)$

$($b$)$ Statements $(1)$ and $(3)$

$($c$)$ Statements $(1),(3)$ and $(4)$

$($d$)$ Statements $(1),(2),(3)$ and $(4)$

Select one:

a$.$

Statements $(1),(2),(3)$ and $(4)$

b$.$

Statements $(1),(2)$ and $(3)$

c$.$

Statements $(1)$ and $(3)$

d$.$

Statements $(1),(3)$ and $(4)$

Question $8$

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BLUERAY Equipment $($Pty$)$ Ltd needs further financing to expand their operations. Which ONE of the following is NOT an example of how BLUERAY Equipment $($Pty$)$ Ltd can raise money externally?

$($a$)$ Borrowing money from their bank.

$($b$)$ Retaining their operating cash flow.

$($c$)$ Borrowing from their creditors.

$($d$)$ Borrowing money from a financial institution.

Select one:

a$.$

Borrowing from their creditors.

b$.$

Borrowing money from a financial institution.

c$.$

Retaining their operating cash flow.

d$.$

Borrowing money from their bank.