Month: February 2021

 It is important that a company is aware of its cost of capital.  In certain cases it is not initially apparent what this cost is (e.g. new share issue, retained earnings etc.) and a number of models have been developed Read More …

INTRODUCTION   It may be necessary to carry out a valuation for: Quoted Companies – where a bid is made and the offer price is an estimated “fair value” in excess of the current market price of the shares. Unquoted Read More …

INTRODUCTION  When an organisation decides on expansion the choice is between organic growth or acquisition.  Organic growth is internal growth by expansion of the existing business (e.g. opening more outlets, major marketing/sales campaign, reduce prices to achieve additional sales etc.)  Read More …

INTRODUCTION To judge the performance of a company or group of companies the analysis of financial statements is normally based largely on ratio analysis. You may be expected to carry out a performance analysis on a set of company accounts.  Read More …

RISK MANAGEMENT -MAIN TECHNIQUES/INSTRUMENTS Interest Rate Guarantee (IRG)/Option These provide a degree of flexibility which is not provided by certain other instruments. They protect one from adverse interest rate movements but also allow one to profit from favourable Interest Rate Read More …

INTRODUCTION In this study unit we will be looking at the workings of the foreign exchange market, and examining the more practical aspects of the subject, such as the different exchange rate systems, the calculation of exchange rates, the impact Read More …

INTRODUCTION A lease is a contract between a lessor (bank/finance house) and a lessee (person/company to whom the asset is leased) for the hire of a specific asset.  The lessor retains ownership but gives the lessee the right to use Read More …

INTRODUCTION  Retained Earnings – -One of the most important sources of new equity funds for companies.  The more funds retained, the less available for the payment of dividends and vice versa. Prime Objective – To maximise the wealth of the Read More …

INTRODUCTION  Many new business ventures are considered too risky for traditional bank lending (term loans, overdrafts etc.) and it is this gap that Venture Capital usually fills. Venture Capital could be described as a means of financing the start-up, expansion Read More …

SHARE CAPITAL Ordinary Shares The main features are: Issued to the owners of the company (equity). Nominal or “face” value (e.g. RWF1,000). Market value moves with market’s view of the company’s performance/prospects. Shareholders are not liable for the company’s debts Read More …