The equity beta of Fence Co is 0·9 and the company has issued 10 million ordinary shares. The market value of each ordinary share is $7·50. The company is also financed by 7% bonds with a nominal value of $100 per bond, which will be redeemed in seven years’ time at nominal value. The bonds have a total nominal value of $14 million. Interest on the bonds has just been paid and the current market value of each bond is $107·14. 2022-01-07 Warden Co plans to buy a new machine. The cost of the machine, payable immediately, is $800,000 and the machine has an expected life of five years. Additional investment in working capital of $90,000 will be required at the start of the first year of operation. At the end of five years, the machine will be sold for scrap, with the scrap value expected to be 5% of the initial purchase cost of the machine. The machine will not be replaced. 2022-01-07 (b) Discuss how the operating statement you have produced can assist managers in: 2022-01-07 Which of the following would you expect to be the responsibility of financial management？ 2022-01-06 Andrew Co is a large listed company financed by both equity and debt. 2022-01-06 An investor believes that they can make abnormal returns by studying past share price movements. In terms of capital market efficiency, to which of the following does the investor’s belief relate？ 2022-01-06 Which of the following statements concerning profit are correct？ 1 Accounting profit is not the same as economic profit 2 Profit takes account of risk 3 Accounting profit can be manipulated by managers 2022-01-06 Drumlin Co has $5m of $0·50 nominal value ordinary shares in issue. It recently announced a 1 for 4 rights issue at $6 per share. Its share price on the announcement of the rights issue was $8 per share. 2022-01-06 Which of the following government actions would lead to an increase in aggregate demand？ 2022-01-06 Governments have a number of economic targets as part of their fiscal policy. Which of the following government actions relate predominantly to fiscal policy？ 1 Decreasing interest rates in order to stimulate consumer spending 2 Reducing taxation while maintaining public spending 3 Using official foreign currency reserves to buy the domestic currency 4 Borrowing money from the capital markets and spending it on public works 2022-01-06