Answer all the question provided below with appropriate stand.

1. Explain the statement 'Corporate virtue in the form of social and ... environmental responsibility is rewarding in more ways than one' (Orlitzky, Schmidt and Rynes, 2003). Identify how different forms of corporate virtue reward different groups of stakeholders.

2. Assume that a public utility commission sets the electricity prices such that the following relation is maintained: Revenues = operating expenses + depreciation + taxes + r book where r is considered to be a 'fair' return on the investment base (book). Book is measured as the book amount of plant and working capital. IAS 16 'Property, plant and equipment' allows firms the option to use the cost model or the revaluation model to measure property, plant and equipment. If an electric utility chooses the revaluation method, how will this affect the pricing equation? Other things being equal, would you expect a utility to use the cost or revaluation method? One condition of an efficient market is if information is rapidly and objectively impounded in stock prices. Sophie states that 'as the market is efficient, then it does not matter if the value of property, plant and equipment is recognised in the financial statements or reported in the notes to the financial statements'. Evaluate Sophie's statement. 3. Simon Silk-Tongue has been the CEO of Variable Returns Limited (VRL) for five years. Simon is rather proud of his achievements in turning around VRL's fortunes. He suggests that this would be good time to take the company public and has retained your company as advisors to the IPO. You also note that Simon's employee share options expire in the next six months. Figure 3 shows the five-year summary of operations from the 2019 annual report.

FIGURE 4.19 VRL five-year summary of operations Assets E Liabilities + Equity Profit Other 2019 1 320 468 128 724 2018 1 298 517 114 667 2017 1 283 561 110 612 2016 1 222 568 84 570 2015 1 135 563 22 550 The ratios are also presented in Figure 4.20. FIGURE 4.20 VRL ratios ROA LEV EPS DPS 2019 9.8% 35.5% 1.28 0.57 2018 8.8% 39.8% 1.14 0.55 2017 8.6% 43.7% 1.10 0.42 2016 6.9% 46.5% 0.84 0.00 2015 1.9% 49.6% 0.22 0.50 Where: . ROA is return on assets (profit/total assets) . LEV is leverage (debt/total assets) . EPS is earnings per shareFIGURE 4.21 VRL summarised footnote disclosures Opening New Reversal Used Closing 2015 90 90 2016 90 14 76 2017 76 76 2018 76 cn 15 56 2019 56 56