Question 1 (a) Answer the following questions:

(i) What is a firms intrinsic value? (2 marks)

(ii) What is a firms current stock price? (2 marks)

(iii) Is the stocks true long run value more closely related to its intrinsic value or its current price? (2 marks)

(iv) When does a stock reach equilibrium? (2 marks)

(b) List the THREE (3) main forms of business organisation and identify ONE (1) advantage and ONE (1) disadvantage for each form of organisation. (9 marks)

(c) Discuss TWO (2) different ways in which businesses obtain capital from suppliers of capital. (8 marks)

[Total: 25 Marks]

HACGd 1 of Years Number 2 1 mage, 11 I GN- of Years 1% Number 16 18% Note: For complt. The interest rate is 10% per year, the present value of $1 ved at year 55.621 APPENDIX TABLE 1 Discount factors: Present value of $1 to be received after years 1/1 + 19 Interest Rate per Year 24% | Present Value Tables Interest Rate per Year 9 25% 10% g : , : | , :