Question
1. Give three broad types of decisions that a financial manager makes 2. Explain what is meant by the term information asymmetry. 3. What main
1. Give three broad types of decisions that a financial manager makes 2. Explain what is meant by the term information asymmetry. 3. What main financial objective does the theory of company finance assume that a business organisation has? 4. Explain the concept of economic value added (EVA) . 5. Which of the following are examples of financial objectives that a company might choose to pursue? (a) Provision of good wages and salaries (b) Restricting the level of gearing to below a specified target level (c) Dealing honestly and fairly with customers on all occasions (d) Producing environmentally friendly products 6. Calculate the economic value added from the following information: A company has reported operating profits after tax of N$70 million. The companys investments amounts to N$600 million and its after tax cost of financing is 9%. 7. Suggest three ways of overcoming the agency problem. 8. Explain why a company may have a positive accounting profit and a negative EVA?
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