<div style='margin-bottom: 20px;'> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What is the primary function of capital markets?</h2> <p style="font-weight: normal; font-size: 1.2rem;">To enable companies to raise new finance.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">How do preference shares differ from ordinary shares in terms of dividends?</h2> <p style="font-weight: normal; font-size: 1.2rem;">Preference shares pay a fixed dividend, while ordinary shares pay variable dividends at the discretion of the directors.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What are the two main areas covered under the topic of long-term finance?</h2> <p style="font-weight: normal; font-size: 1.2rem;">Sources of long term finance and the cost of long-term funds.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">How do covenants in debt financing agreements serve to protect the lender?</h2> <p style="font-weight: normal; font-size: 1.2rem;">Covenants restrict the borrower's actions, such as limiting dividend payments and requiring certain financial ratios, to reduce the lender's risk.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What percentage of the syllabus is dedicated to financing capital projects?</h2> <p style="font-weight: normal; font-size: 1.2rem;">15%</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What distinguishes a private limited company from a public limited company in terms of share offering?</h2> <p style="font-weight: normal; font-size: 1.2rem;">Private limited company shares may not be offered to the general public, unlike public limited company shares.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What is a key advantage of a company obtaining a stock exchange listing?</h2> <p style="font-weight: normal; font-size: 1.2rem;">It provides a more accurate valuation of the entity.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What are the main advantages of debt financing for a company?</h2> <p style="font-weight: normal; font-size: 1.2rem;">Debt financing does not confer ownership rights, interest is tax-deductible, and it carries the potential for flexible repayment terms.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">Share prices tend to fall due to uncertainty about future profits, dividends, and the dilution of earnings per share.</h2> <p style="font-weight: normal; font-size: 1.2rem;"></p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What is the primary purpose of a rights issue in corporate finance?</h2> <p style="font-weight: normal; font-size: 1.2rem;">To raise new capital by offering existing shareholders the opportunity to purchase additional shares, usually at a discount.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">How do the UK's two main capital markets differ in terms of their target companies and entry requirements?</h2> <p style="font-weight: normal; font-size: 1.2rem;">The full Stock Exchange targets larger companies with high entry costs and scrutiny, while the AIM is for smaller companies with lower costs and less stringent criteria.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">How does a tender offer differ from a fixed price offer in the context of an IPO?</h2> <p style="font-weight: normal; font-size: 1.2rem;">In a tender offer, investors bid at or above a minimum price, with shares allocated at a 'strike price' ensuring the company raises the required finance, unlike a fixed price set by the company.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What are the primary benefits of a company deciding to list its shares on a stock exchange?</h2> <p style="font-weight: normal; font-size: 1.2rem;">Enhancing the entity's profile, raising capital for future investments, and making employee share schemes more accessible.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What distinguishes revolving credit facilities (RCFs) from other forms of debt financing?</h2> <p style="font-weight: normal; font-size: 1.2rem;">RCFs offer flexible borrowing up to a pre-approved limit, with interest paid only on the amount used, allowing for efficient capital use and repayment.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What challenges might a small entity face when listing its shares on a stock exchange?</h2> <p style="font-weight: normal; font-size: 1.2rem;">High costs associated with the process, loss of control by original owners, stringent reporting requirements, and adherence to stock exchange rules.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What are the key considerations for a company when selecting the issue price and quantity for a rights issue?</h2> <p style="font-weight: normal; font-size: 1.2rem;">The issue price is normally set below the market price to encourage participation, and the quantity of shares issued is determined based on the desired capital raise and its impact on earnings per share and dividend cover.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What role do investment banks play in the process of issuing new shares?</h2> <p style="font-weight: normal; font-size: 1.2rem;">They lead share issues, advising on specialist appointments, stock exchange requirements, share issuance details, underwriting, and offer publication.</p> </div> <div style="margin-bottom: 10px; background-color: #f2f2f2; border-radius: 1rem; padding: 10px 20px;"> <h2 style="font-weight: bold; margin-bottom: 3px; font-size: 1.5rem;">What is the purpose of pre-emption rights in a rights issue?</h2> <p style="font-weight: normal; font-size: 1.2rem;">To give existing shareholders the chance to prevent dilution of their stake by buying new shares before outside investors.</p> </div> </div>