Three of your former classmates from the University of London have started a businesssupplying custom-made construction materials (like pre-fabricated bathroom units) to construction companies and student housing properties. They have offered you a chance to invest in their company as a shareholder. What type of questions would you need to ask them to help assess the risk of this investment opportunity? The topics covered by your questions should include: (Select the best choice below.) A. Profitability (what amount of profits have they been making). B. Dividend payout (how much of the profit is being paid out as dividends over the past years) C. How robust is their business plan? D. Capital structure (financial strength of the business can be assessed by the capital structure and the quality of assets) E. Governance structure (the risk can be assessed by understanding governance structure of the business) F. All of the above.
Three of your former classmates from the University of London have started a businesssupplying custom-made construction materials (like pre-fabricated bathroom units) to construction companies and student housing properties. They have offered you a chance to invest in their company as a shareholder. What type of questions would you need to ask them to help assess the risk of this investment opportunity?
The topics covered by your questions should include: (Select the best choice below.)
A.
Profitability (what amount of profits have they been making).
B.
Dividend payout (how much of the profit is being paid out as dividends over the past years)
C.
How robust is their business plan?
D.
Capital structure (financial strength of the business can be assessed by the capital structure and the quality of assets)
E.
Governance structure (the risk can be assessed by understanding governance structure of the business)
F.
All of the above.
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