(a) Distinguish between operating assets and financial assets. Under what circumstances may one be preferable to the other with specific reference to Financial Services Companies? (10 Marks)

(b) Indicate why agency problems exist between management and shareholders. What factors will ensure an alignment between the objectives of shareholders and management? (10 Marks)

(c) Distinguish between profit maximisation and value maximisation. Are these 2 concepts linked or mutually exclusive? (5 Marks)

(d) Discuss the factors to be considered in choosing between traded bonds, new equity issued via a placing and venture capital as sources of finance. (5 Marks)