ACCA Paper F9 Financial Management Study Materials F9FM Session20Index d08
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¾ identify objectives (financial and otherwise) in not-for-profit organisations and identify the extent to which they differ from private
Do not include financing cash flows because the cost of finance is measured in the cost of capital/discount rate - finance costs are taken into account by the discounting
buy decisions, the key is to separate the financing decision from the investment decision and analyse each at a discount rate reflecting the risk of the cash flows. Also remember
The cash flows, probabilities, or cost of capital are varied until the decision changes, i.e.. the NPV
³ Preference shares are in substance debt as they pay a fixed committed dividend in priority to any ordinary dividend. They also rank ahead of ordinary shareholders upon
The efficient management of liquidity and risk in a business including the management of funds (generated from internal and external sources), currencies and cash flow. As
¾ Covered interest rate arbitrage = simultaneously borrowing domestic currency, transferring it into foreign currency at the spot exchange rate, depositing the foreign currency,
Financial risk – the increased volatility of returns to ordinary shareholders due to interest on debt being a fixed committed cost. Financial distress risk – the risk of
