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.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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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