Which of the statements below best describes a pragmatic funding policy approach?

a. Company is hoping for fast growth and hence places a lot of reliance on short term sources of finance a. Company is hoping for fast growth and hence places a lot of reliance on short term sources of finance b. Maturity dates of funds borrowed roughly matches length of useful economic life of different types of assets acquired with the borrowed funds. b. Maturity dates of funds borrowed roughly matches length of useful economic life of different types of assets acquired with the borrowed funds. c. Company wants to minimise risk and hence avoids short term financing c. Company wants to minimise risk and hence avoids short term financing d. All of the statements

Leaning on the trade is a. A low cost form of external finance a. A low cost form of external finance b. A form of equity finance provided by the shareholders of a company b. A form of equity finance provided by the shareholders of a company c. A high cost form of external finance c. A high cost form of external finance d. An internal source of finance where payments to suppliers are delayed

Disadvantages of using external sources of finance are a. May need to relinquish all or part control of the business a. May need to relinquish all or part control of the business b. None of the statements b. None of the statements c. High Interest Expense cost c. High Interest Expense cost d. All of the statements

Which of the following is a feature of an operating lease? a. It is considered a low cost form of long term finance a. It is considered a low cost form of long term finance b. The lessee enjoys the risks and rewards of ownership of the leased asset in substance b. The lessee enjoys the risks and rewards of ownership of the leased asset in substance c. Lessee is responsible for the maintenance and insurance of the leased asset c. Lessee is responsible for the maintenance and insurance of the leased asset d. Lessee does not have control of the leased asset

Which of the following is deemed a long term source of external finance a. Delaying payment to Trade Payables/Creditors a. Delaying payment to Trade Payables/Creditors b. Retained Earnings b. Retained Earnings c. Bank Overdraft c. Bank Overdraft d. Issuing Ordinary Shares to new and existing shareholders

Which of the following is an advantage for a company of NOT having its ordinary shares listed on a public stock exchange a. Increases the public profile of the company a. Increases the public profile of the company b. None of the statements provided b. None of the statements provided c. Increases the likelihood of synergies being achieved via a merger or acquisition c. Increases the likelihood of synergies being achieved via a merger or acquisition d. Access to increased sources of finance

Which of the following is an advantage to holding ordinary shares, from the perspective of a shareholder? a. Geopolitical events can affect the share price a. Geopolitical events can affect the share price b. Company decides whether to pay an ordinary dividend each year. b. Company decides whether to pay an ordinary dividend each year. c. The right to vote at the Annual General Meeting of the company c. The right to vote at the Annual General Meeting of the company d. Dividend Income is taxable for the shareholder

A companys gearing ratio would rise if a. A decrease in long term loan balance is less than the decrease in the overall equity balance a. A decrease in long term loan balance is less than the decrease in the overall equity balance b. Long term loan interest rates fall b. Long term loan interest rates fall c. A decrease in long term loan balance is more than the decrease in the overall equity balance c. A decrease in long term loan balance is more than the decrease in the overall equity balance d. Long term loan interest rates rise