Part (a) of question four required candidates to discuss a company’s current dividend, financing and risk management policies, and how these may be affected by returning retained funds to shareholders. On the whole, the discussion of the dividend and financing policies was good, with some excellent points made.

The discussion on risk management was not as good. The consequences of returning retained funds reflected the quality of the initial discussion. However, weaker responses tended to be descriptive, often repeating the narrative of the question, rather than being discursive.

Also many candidates failed to pick up the point that the nature of the growth of the industrial sector affects the risk management, financing and dividend policies of the company.