Back to the full dot-point answer
ScotlandBusiness ManagementQuick questions
Management of Finance
Quick questions on Sources of finance - SQA Higher Business Management
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is share issue?Show answer
A public limited company can issue new shares to the public on the stock exchange, raising large amounts of permanent capital that does not have to be repaid and carries no compulsory interest (only dividends when the firm chooses). The drawback is that issuing shares dilutes ownership and control, it is expensive and regulated, and a larger share base increases takeover risk.
What is retained profit?Show answer
Retained profit is profit from previous years kept back and reinvested in the business. It is a major source for established firms because it has no interest cost, no repayment and no loss of control, but it is limited to what the firm has earned and using it means less is available for dividends.
What is q1?Show answer
Describe retained profit as a source of finance. [2 marks]
What is q2?Show answer
Explain two factors a large business would consider when choosing a source of finance. [4 marks]
Have a question we have not covered?
This dot-point answer is short enough that we have not extracted many short questions yet. Read the full dot-point answer or ask Mo, our study assistant, in the chat for follow ups.