Bonus questions Flashcards
Is preference share capital included in the calculation for net asset value on a financial statement?
Yes
What is preference share capital included as in the calculation for net asset value on a financial statements?
A liability
How much of the board should be Non-Executive Directors?
At least half
Should NED’s be independant?
Yes
Can the chairman and CEO be the same person?
No
What should executive directors clearly disclose?
Financial rewards
What do Executive directors have to do?
Submit for re election
How often should directors submit themselves for re-election
At least every three years
What should NED’s not hold?
Share options in the company
What are externalities?
Costs which are not paid by the producers or consumers of a product but by other members of society.
What are three reasons for soft capital rationing?
- Company do not want to take on more interest payments
- Dont want to dilute EPS
- Controlled rather than rapid growth
- Only pursue the best investment projects
What are two reasons for hard capital rationing?
- Company too risky
- Economic environment
