FIN4801
EXAM PACK
, lOMoAR cPSD| 64694231
UNIVERSITY EXAMINATIONS
January/ February 2025
FIN4801
Advanced Financial Management
100 Marks
Duration: 4 Hours
Instructions:
• This paper consists of 13 pages, including appendix A (financial tables) on pages 9 to 13.
• This is an open-book examination.
• As the examination is an assessment, it should be your own work and you should remember to
tick the Declaration of Honesty.
• Plagiarism checks will be run on your submission on Turnitin and manual checks will be done.
• Remember to save your file as a PDF before submitting it.
• Start submitting it as soon as the writing time for the paper has stopped (after the four hours).
Do not use your upload time to answer the paper.
• Ensure that your answers are uploaded on time, you have one hour to upload.
• We cannot help you in the last 15 minutes of the upload time and you must contact us
immediately if you are experiencing any issues with uploading or during the paper.
• Answer all the questions.
• Show all your calculations clearly and label your answers.
• Submit your paper on the myExams platform.
• See the instructions regarding the Invigilator Application on the next page.
Please take note that The Invigilator App will request you take a picture of every page of your
answer sheet at the end of the assessment.
,Please take note that this does not replace your formal scan and upload to your Learning
Management System (MyExams).
YOUR EXAM QR CODE & QR ACCESS CODE:
INSTRUCTIONS ON THE DAY OF ASSESSMENT:
• Please log into The Invigilator App. You need to be connected to the internet in order to log in and
scan the QR code.
• Scan the QR code above once the examination formally commences. If you encounter difficulty with
scanning of the QR code you can also enter the QR access code at the bottom of the QR code in order
to start the assessment.
• Once the QR code is scanned, you can place your smartphone next to you. The Invigilator App will
notify you when an action is required. Ensure your media volume Is turned up.
• You may access your MyExams in the application if you only have one device by pressing the ‘access
LMS’ button.
• Please remember to keep your smartphone on charge for the duration of the assessment.
• Keep The Invigilator app open on your cell phone during the assessment. You are not allowed to
leave or minimise the application.
• When an action is required, a notification beep will be heard. Action the request.
• Please ensure you are connected to the internet in order to commence the examination as well as at
the end of the examination. No internet connection is needed during the assessment. • It is important
to first upload your script to the MyExams. Uploading of app data is not time sensitive and you can
do it after you have uploaded your script to the MyExams.
• It is important to note that you have to adhere to the time limit in your MyExams assessment as the
invigilation time in the app could exceed the time allocated to complete your assessment.
• You can click the "Finish Assessment" button in the app if you finish early.
• Should you encounter any technical difficulty, please WhatsApp The Invigilator Helpdesk on 073
505 8273.
QUESTION 1 [5 marks]
This question is comprised of three multiple-choice questions (MCQs). Write down only the
question number and the corresponding answer option you choose, for example:
, lOMoAR cPSD| 64694231
Question 7.9: C.
Question 1.1 (1 mark)
Brundle Ltd is a reseller of dried foods, which is a burgeoning market. The company requires
funding to expand. With inflation expectations increasing rapidly, the owners wish to raise equity
rather than debt. If the company were to raise a significant amount of equity from purely new
sources, with all else staying the same as before, what would you expect would change for the
company?
Choose the most correct option below.
The company’s … .
a. EPS would increase, beta would increase and the current control would be diluted
b. EPS would decrease, beta would increase and the current control would be consolidated
c. EPS would decrease, beta would decrease and the current control would be diluted
d. EPS would decrease, beta would decrease and the current control would be consolidated
Question 1.2 (3 marks)
Rad Ltd supplies clothing products to retail outlets and has recently spun off its growing online
operations into a separate company. The management and board of the company resolved to follow
a strict residual approach to dividend pay-outs in the future, as limited growth is expected from
the retail sector. In the current year, of which we are at the end, the company has generated a net
profit (available to ordinary shareholders) of R30 000 000 and has 150 000 ordinary shares
outstanding. The company expects capital requirements of R10 000 000 in the coming year. If the
company raises half of its funds from debt, what pershare dividend would it pay this year?
a.) R100
b.) R125
c.) R166
d.) R200
Question 1.3 (1 mark)
Links Ltd, a logistics company, is considering buying a smaller competitor in the same
industry. The competitor, Smartmove Ltd, has a current share price of R10. Links Ltd’s
shares trade at R50.
Determine the exchange ratio based on market values and choose the nearest option below.
EXAM PACK
, lOMoAR cPSD| 64694231
UNIVERSITY EXAMINATIONS
January/ February 2025
FIN4801
Advanced Financial Management
100 Marks
Duration: 4 Hours
Instructions:
• This paper consists of 13 pages, including appendix A (financial tables) on pages 9 to 13.
• This is an open-book examination.
• As the examination is an assessment, it should be your own work and you should remember to
tick the Declaration of Honesty.
• Plagiarism checks will be run on your submission on Turnitin and manual checks will be done.
• Remember to save your file as a PDF before submitting it.
• Start submitting it as soon as the writing time for the paper has stopped (after the four hours).
Do not use your upload time to answer the paper.
• Ensure that your answers are uploaded on time, you have one hour to upload.
• We cannot help you in the last 15 minutes of the upload time and you must contact us
immediately if you are experiencing any issues with uploading or during the paper.
• Answer all the questions.
• Show all your calculations clearly and label your answers.
• Submit your paper on the myExams platform.
• See the instructions regarding the Invigilator Application on the next page.
Please take note that The Invigilator App will request you take a picture of every page of your
answer sheet at the end of the assessment.
,Please take note that this does not replace your formal scan and upload to your Learning
Management System (MyExams).
YOUR EXAM QR CODE & QR ACCESS CODE:
INSTRUCTIONS ON THE DAY OF ASSESSMENT:
• Please log into The Invigilator App. You need to be connected to the internet in order to log in and
scan the QR code.
• Scan the QR code above once the examination formally commences. If you encounter difficulty with
scanning of the QR code you can also enter the QR access code at the bottom of the QR code in order
to start the assessment.
• Once the QR code is scanned, you can place your smartphone next to you. The Invigilator App will
notify you when an action is required. Ensure your media volume Is turned up.
• You may access your MyExams in the application if you only have one device by pressing the ‘access
LMS’ button.
• Please remember to keep your smartphone on charge for the duration of the assessment.
• Keep The Invigilator app open on your cell phone during the assessment. You are not allowed to
leave or minimise the application.
• When an action is required, a notification beep will be heard. Action the request.
• Please ensure you are connected to the internet in order to commence the examination as well as at
the end of the examination. No internet connection is needed during the assessment. • It is important
to first upload your script to the MyExams. Uploading of app data is not time sensitive and you can
do it after you have uploaded your script to the MyExams.
• It is important to note that you have to adhere to the time limit in your MyExams assessment as the
invigilation time in the app could exceed the time allocated to complete your assessment.
• You can click the "Finish Assessment" button in the app if you finish early.
• Should you encounter any technical difficulty, please WhatsApp The Invigilator Helpdesk on 073
505 8273.
QUESTION 1 [5 marks]
This question is comprised of three multiple-choice questions (MCQs). Write down only the
question number and the corresponding answer option you choose, for example:
, lOMoAR cPSD| 64694231
Question 7.9: C.
Question 1.1 (1 mark)
Brundle Ltd is a reseller of dried foods, which is a burgeoning market. The company requires
funding to expand. With inflation expectations increasing rapidly, the owners wish to raise equity
rather than debt. If the company were to raise a significant amount of equity from purely new
sources, with all else staying the same as before, what would you expect would change for the
company?
Choose the most correct option below.
The company’s … .
a. EPS would increase, beta would increase and the current control would be diluted
b. EPS would decrease, beta would increase and the current control would be consolidated
c. EPS would decrease, beta would decrease and the current control would be diluted
d. EPS would decrease, beta would decrease and the current control would be consolidated
Question 1.2 (3 marks)
Rad Ltd supplies clothing products to retail outlets and has recently spun off its growing online
operations into a separate company. The management and board of the company resolved to follow
a strict residual approach to dividend pay-outs in the future, as limited growth is expected from
the retail sector. In the current year, of which we are at the end, the company has generated a net
profit (available to ordinary shareholders) of R30 000 000 and has 150 000 ordinary shares
outstanding. The company expects capital requirements of R10 000 000 in the coming year. If the
company raises half of its funds from debt, what pershare dividend would it pay this year?
a.) R100
b.) R125
c.) R166
d.) R200
Question 1.3 (1 mark)
Links Ltd, a logistics company, is considering buying a smaller competitor in the same
industry. The competitor, Smartmove Ltd, has a current share price of R10. Links Ltd’s
shares trade at R50.
Determine the exchange ratio based on market values and choose the nearest option below.
