CIMA Financial Strategy F3 Question # 17 Topic 2 Discussion

CIMA Financial Strategy F3 Question # 17 Topic 2 Discussion

F3 Exam Topic 2 Question 17 Discussion:
Question #: 17
Topic #: 2

A listed company is financed by debt and equity.

If it increases the proportion of debt in its capital structure it would be in danger of breaching a debt covenant imposed by one of its lenders.

 

The following data is relevant:

  

 F3 Question 17

The company now requires $800 million additional funding for a major expansion programme. 

 

Which of the following is the most appropriate as a source of finance for this expansion programme?


A.

Retained earnings


B.

Private placement of a bond


C.

Rights issue


D.

Bank overdraft


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