Waec Model Questions Vol1 2024 Commerce Question 8

Practice essay / theory question 8 from the 2024 Waec Model Questions Vol1 Commerce examination. This question covers Sources of Finance, Internal Finance, Bank Loans, Equity Finance, Leasing .

Waec Model Questions Vol1 2024 Commerce Essay / Theory

Topics: Sources of Finance Internal Finance Bank Loans Equity Finance Leasing

Question 8 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • COMMERCE • essay

A medium‑scale textile firm, TextileCo Ltd, needs ₦150 million to modernise its production line. The firm is evaluating four possible sources of finance: (i) internal retained earnings, (ii) a bank term loan, (iii) issuing new ordinary shares, and (iv) leasing the new machinery.

Question Parts

( a )

Discuss the advantages and disadvantages of using internal retained earnings as a source of finance for TextileCo, considering cost, risk and control.

( b )

Discuss the advantages and disadvantages of obtaining a bank term loan, assuming an interest rate of 12% per annum payable over 5 years.

( c )

Discuss the advantages and disadvantages of raising capital by issuing new ordinary shares, assuming the current market price per share is ₦5,000.

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About This Question

This is Waec Model Questions Vol1 2024 Commerce Question 8. It is one of the essay questions from the 2024 Waec Model Questions Vol1 Commerce examination.

The question covers Sources of Finance, Internal Finance, Bank Loans, Equity Finance, Leasing .

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