Gce Model Questions Vol1 2025 Commerce Question 8
Practice objective / multiple choice question 8 from the 2025 Gce Model Questions Vol1 Commerce examination.
A small business needs ₦500,000 of capital. It can either (i) obtain a bank loan for the full amount at a simple interest rate of 12\% per annum, or (ii) issue new shares priced at ₦80 each, promising an annual dividend equal to 8\% of the share price. The business expects a profit before any financing costs of ₦120,000 per year. Which source of finance will give the higher net profit after financing costs, and what will that net profit be?
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This is Gce Model Questions Vol1 2025 Commerce Question 8. It is one of the objective questions from the 2025 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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