Business Activity & The Changing Environment

Task 1
‡ Write down your name and what grade you would like to achieve in Business & how you expect to get that grade

What is business?
‡ A place where a firm buys and sells things in exchange for money ‡ They aim to make a profit ‡ What ways do you think they could make a profit/

Your activity ‡ Write down three things that a business may aim to do from the beginning ‡ What do you think their objectives would be? .

Task 2 ‡ Think of 1 business that you are familiar with & write down three things about this business ‡ Why do you think this business is successful? .

company history. products/services. employees.Homework ‡ Pick an organisation that you either like or dislike ‡ Research the company and give your findings ‡ Headings may include. market share etc ‡ Please do not copy from internet .

Year 10 Business Business activity & the changing environment .

A.L.T:  Distinguish between the different types of business organisations  Explain what these different types of organisations offer W.F:  You to give your own thoughts& opinions  You to participate  You to work as part of a team .Objectives W.I.L.

Starter activity ‡ What are the functions of a business? ‡ List all the people that are involved in a business ‡ What ways can people raise finance for their business? .

Types of businesses ‡ Sole Trade ‡ Partnerships ‡ Co-operatives ‡ Private Limited Company (LTD) ‡ Franchises ‡ Public Limited Company (PLC) .

Sole Trader ‡ An individual which trades under his/her own name ‡ Is totally independent ‡ Makes all the important decisions ‡ Responsible for paying all of the debts ‡ Few formalities in setting up ‡ Can employ as many people as he/she wishes .

Advantages of a Sole Trader ‡ Decisions can be made quickly ‡ Leads to greater interest & more dedicated & hard working owner ‡ Profits are kept by the sole trader ‡ Paperwork is minimal ‡ Easy to start trading as the sole trader ‡ Has close contact with employees and customers ‡ Problems are easier to solve .

Disadvantages of a Sole Trader ‡ Personally liable for all debts that it occurs (unlimited liability) ‡ Less capital available for expansion ‡ Taxed at a higher rate than a private company ‡ May have difficulty in managing all business functions ‡ When the sole trader dies so does the business ‡ Raising capital could be difficult for one person .

Examples of Sole Traders ‡ Corner shop ‡ Coffee shop ‡ Carpenters .

Your task
‡ Suggest two advantages & two disadvantages of a person setting up as a sole trader ‡ List two objectives that a sole trader may have

Partnerships
‡ Can have between 2 & 20 partners ‡ Set up under the Partnership Act 1890 ‡ A partnership deed can be used to set out the rights of the partners ‡ Aim to make a profit

Examples of partnerships
‡ Doctors ‡ Accountants ‡ Solicitors

Advantages of a partnership ‡ More capital is available than for the sole trader because more people are contributing ‡ Better use of business expertise because each partner can concentrate on what they are good at ‡ Better decision making because decisions are made after discussions .

Disadvantages of Partnerships ‡ Group decision making may cause conflict between partners ‡ Like sole traders. partners have unlimited liability thus they are liable for all the debts of the business ‡ Decision making can be slower which can lead to inflexibility ‡ Profits must be shared .

Your task ‡ Why is it important that a business has a deed of partnership? ‡ Why do you think partnerships are a good idea? .

the shareholders of the company are not responsible for paying the debts of the business .Key terms Unlimited liability The owners are personally responsible for paying debts if the business goes bankrupt Limited liability If the company goes into liquidation.

Business Activity and the changing environment .

T: ‡ Explain the different types of business organisations ‡ Examine the different finance methods available to business W.L.Objectives W.I.A.L.F: ‡ Your participation ‡ Your ideas and opinions ‡ Complete tasks .

Starter Activity ‡ You have started up your own business in Nottingham ‡ Make a list of all the things which are necessary to make this business successful .

Private Limited Company ‡ A company that is a legal entity in its own right ‡ It can be sued and can sue ‡ Shareholders own the business ‡ A group of between 2 & 50 people who buy the shares are called the shareholders ‡ Cannot sell shares to the public .

Public Limited Company ‡ Can sell their shares to members of the public through the stock exchange ‡ Must have at least 7 shareholders with no maximum limit ‡ Must issue a prospective detailing the history of the company & inviting the public to buy shares .

Public Limited Company ‡ Shares are bought & sold on the stock exchange ‡ Accounts must be published and audited on an annual basis ‡ An annual report must also be compiled each year .

Advantages of a public limited company ‡ Limited liability ‡ Easier than private limited company to raise capital ‡ Attract top management because of public image ‡ Continuity of existence ‡ Lots of publicity based on stock exchange quotations .

Disadvantages of a public limited company ‡ High formation costs ‡ Accounts have to be published ‡ Profits must be distributed to shareholders ‡ Ownership & control are separated because although the shareholders own the company the Board of Directors make the decisions .

Key Terms Shares ‡ These are long term sources of finance ‡ Sold to people who become shareholders of the company ‡ A plc is able to advertise its shares for sale to the general public ‡ A private limited company must sell their shares privately Shareholders ‡ These are people who own part of the Business .

Sources of finance ‡ Internal sources of finance ‡ External sources of finance .

Internal sources of finance ‡ Retained profits ‡ Stock reduction ‡ Assets sale ‡ Limiting credit to customers .

External sources of finance ‡ Owners capital ‡ Hire purchase and leasing ‡ Overdrafts and loans ‡ Grants .

Franchises & Sources of Finance .

A.F:  You to create a suitable advert for the sale of a franchise  You to answer multiple choice questions and exam style questions .I.L.T:  Evaluate the idea of owing a franchise& determining what advantages & disadvantages there are associated with it  Distinguish between the various sources of finance available to businesses W.Objectives W.L.

Starter Activity ‡ What are the various businesses organisations that we have done? ‡ What is an entrepreneur? ‡ What are the characteristics of an entrepreneur? ‡ What are the two sources of finance called? ‡ List three finance methods associated with each .

What is a franchise? ‡ Involves paying a fee & agreeing to produce goods exactly in accordance with the franchise company·s policy ‡ Payments are made on a regular basis depending on profits made ‡ Training & supervision are provided .

Price £375.Your task ‡ Create a newspaper advert selling a franchise ‡ Example: Mc Donald·s largest restaurant for sale as a going concern to suitable franchisee(address) Excellent trading figures.000 . full training provided.

The Stock market Internet site .

police force. schools & hospitals ‡ Public means that they are owned by the government for the benefit of the people who run them .The public and private sector ‡ The public sector includes everything that is owned by the government ‡ Examples-army.

The public and private sector ‡ The private sector contains all the businesses owned by private individuals ‡ Almost all the businesses you can think of are in the private sector ‡ Private means that these businesses are run for the benefit of the people who own them .

Strengths of the free market private sector ‡ Employers & employees can create their own personal wealth through the profit motive & hard work ‡ A greater range of products are supplied ‡ People have greater freedom to choose & but what they want ‡ Competition helps keep prices down & encourages new ideas .

Strengths of the planned public sector ‡ Public services do not depend on the profit motive & will be supplied even at a loss ‡ The provision of basic services available to all regardless of people·s ability to pay them .

I.Objectives W.A.F:  You to distinguish between the different factors of production  You to start working on cash flow and its importance .L.T:  Outline the various factors of production  Explain how each factor is important to a business W.L.

Factors of production ‡ These four factors of production are the resources that are used to produce the economy·s goods & services ‡ Land ‡ Labour ‡ Capital ‡ Enterprise .

Factors of production Land  All businesses need land to create their products  They may use the land. build on the land or extract from the land Labour  Businesses need to employ people to make and market their products  The UK·s labour force is made up of all the men & women who are available to work .

Factors of production Capital  To make their goods or to provide their services. buildings. vehicles and other major resources Enterprise  The entrepreneur owns the business and is prepared to take the chance that his or her product will be a success . firms need to invest money in machinery.

Cash Flow .

I.A.F:  You to create a cash flow with various figures given .L.L.Objectives W.T:  Create a cash flow statement  Differentiate between fixed & variable costs & total costs W.

Starter Activity-match the key word to the meaning Sole Trader Entrepreneur You must pay back what you put in & all debt You only lose the amount of money put into the business An individual willing to take risks in setting up a business Business organisation that is owned by a single person Limited Liability Unlimited Liability .

Cash Flow ‡ Is the flow of all money into and out of the business ‡ Cash flow is important because if there is not enough money flowing in you don·t have enough to pay bills .

Poor cash flow=big problems ‡ Not enough cash to pay daily expenses ‡ Lack of working capital ‡ Staff don·t get paid on time ‡ Creditors may not get paid on time ‡ May become bankrupt .

Your task 1) What is a cash flow? 2) Why should a business prepare a cash flow? 3) Why does a business need to keep an eye on their finances? .

Reasons for preparing a cash flow ‡ Lets a business know if they will have enough money to meet payments due ‡ Indicates which months there will be a cash shortage .

How to prepare a cash flow ‡ Estimate money coming in ‡ Estimate money going out ‡ Subtract payments from receipts ‡ The closing balance will be the opening balance for the following month .

The different costs involved Fixed costs:  Costs which have to be paid no matter what has been sold or produced Variable costs:  Costs that vary according to the amount produced or sold Total costs:  Fixed costs + variable costs .

000 120.000 2000 1800 400 6000 Short term Medium term Long term .000 18.000 60.Tick which source of finance is necessary for the following £ Stock for resale Premises Machinery Vehicles Land Oil Wages Telephone Computers 10.000 50.

F:  You to relate questions to lessons that we have completed already .I.L.A.Objectives W.T:  Distinguish between the various types of stakeholders  Match the type of stakeholder to a various aim W.L.

Starter Activity 1. 1. 1. . Customers are an example of a firm·s -----------(12) Business objectives are set by the ------(6) An example of an internal stakeholder group is --------(9) Public sector organisations have objectives based on -------(7) 1.

directors Variable costs: ‡ External-local community.Stakeholders ‡ Internal-owners. managers. bank. suppliers .

Your task ‡ Select a business of your choice and write about the various stakeholders that would be affected by it .

Match an appropriate aim to each stakeholder group Group Customers Local Community Lenders Employees Aim No pollution A return on their investment Job security Lower prices .

Judging success-how are objectives measured? ‡ Size ‡ Turnover/market share ‡ Shareholders ‡ Number of employees/staff turnover ‡ Customer satisfaction/number of complaints .

Factors of production .

I.L.T:  Examine the different factors of production and how they affect a business  Relate the factors of production to a particular business situation W.L.F:  Your thoughts and opinions based on these topics and how they would relate them to a particular business scenario .A.Objectives W.

Starter Activity ‡ What are the four factors of production? ‡ Explain what is meant by each of those factors Fill in the blanks:  Employees earn -----(w)  The owners of capital receive --------(I)  Entrepreneurs make -------(p)  The owners of land receive ----(R) .

Areas to be covered ‡ Primary Industry ‡ Secondary Industry ‡ Tertiary Industry ‡ Employment .

g. stone.The primary industry ‡ These are businesses that extract something e. fish and ore ‡ The location of these businesses usually depends on where the resources being extracted are found . oil. coal.

The secondary industry ‡ Theses are businesses that construct or manufacture something ‡ Their location is influenced by many factors such as government support and the existence of a suitable labour force .

The Tertiary industry ‡ This is the service sector and supports the other two industries ‡ Services include transport. training and advertising ‡ Their location will be influenced by the services required by firms in the other two industries . finance. insurance.

Your task      Classify each of these businesses as either primary. secondary or tertiary: A specialist distribution firm A builder A building society A forestry plantation A computer manufacturer List four major influences on location .

F: ‡ You to distinguish between the different production methods and give relevant examples .I.L.T: ‡ Distinguish between the different types of production ‡ Categories different items into the correct production method W.A.Objectives W.L.

co.Starter Activity ‡ Factors of production ²jumbled up words ‡ Access business studies on line ‡ http://www.htm#GCSEBusMod1Factors .uk/Gc seBusiness/Activities/Module1/Module1Me nu.businessstudiesonline.

Methods of production Job production: ‡ when a business makes a single one of product ‡ The job is often built by skilled labour working to the customer requirements ‡ Since only one item is made the business may not gain economies of scale .

Methods of production Batch production:  When there is more than one item made  Each batch of products are finished before the next batch .

Methods of production Mass production ‡ When identical items are made on a production line ‡ The product moves from one stage to the next .

size 7 Television The channel Tunnel State one advantage and one disadvantage of mass production .Chose either job. batch or mass ‡ ‡ ‡ ‡ ‡ Cans of paint A factory extension Shoes.

businessstudiesonline.uk/Gc seBusiness/Activities/Module4/Module4M enu.Starter Activity ‡ Refer to hand out sheet ‡ Also grade or no grade quiz ‡ http://www.htm#GCSEBusMod4ProductionMethod s .co.

Factors of location & PEST analysis .

Starter Activity 1) Describe what is meant by batch production 2) A cost which remains the same regardless of the level of production is _____ cost 1) A cost which changes according to the level of production is a _____ cost .

no need for additional storage facilities ‡ Cell production-where people make a particular part of the product and moves continually ‡ Kaizen-invest in skilled people rather than technology ( continuous improvement) .Developments in production ‡ Just in time-only buy stock as you need them.

Lean production ‡ Refers to the various ways that are now used to improve the efficiency of production ‡ Tries to cut development time ‡ Associated with just in time. cell production and the Kaizen system .

Your Task ‡ Choose an organisation of your choice and outline what type of production mostly suits them and give relevant reasons why .

The Government ‡ They create various laws and regulations that affect businesses ‡ The EU and the UK Government also support firms ‡ The Government want to be paid VAT and taxes .

T analysis 15th October 2007 .E.S.The P.

Objectives W.t analysis on a business  Distinguish the difference between P.t analysis to a particular business (case study) .L.s.L.s.e.A.E.I.T W.T:  The importance of the p.S.F:  You to relate the p.e.

The PEST analysis Refer to the handout  A scan of the external macro-environment in which the firm operates can be expressed as.     Political Economic Social Technological .

The steps involved Environmental Scan External analysis Internal analysis Microenvironment Ma croenvironment P.E.S.T .

environmental regulations. employment laws. trade restrictions and tariffs. political stability .Political Factors ‡ These include government regulations & legal issues ‡ Defines both formal & informal rules ‡ Examples-tax policy.

exchange rates. interest rates.Economic Factors ‡ Economic factors affect the purchasing of potential customers and the firms cost of capital ‡ Examples-economic growth. inflation rates .

emphasis on safety . age distribution.Social Factors ‡ These include demographic and cultural aspects of the external microenvironment ‡ These affect customer needs and the size of potential markets ‡ Examples-health consciousness. population growth rate. career attitudes.

rate of technological change .Technological Factors ‡ These can lower barriers to entry. automation. reduce minimum efficient production levels and influences outsourcing decisions ‡ Examples-research and development. technology incentives.

Case study ‡ Relate to the p.t case study ‡ Read through case study and answer questions based on this case study .e.s.

recovery ‡ Diagram ‡ The business cycle business studies on line part .The Business Cycle ‡ This shows the regular patterns of upturns and downturns of the level of output in the economy ‡ Goes through stages-boom. slump.

The phases ‡ Boom-is the part of the business cycle in which output rises ‡ Slump-is a severe form of recession ‡ Recovery-is the part of the business cycle when output begins to grow again after a slump .

Your task ‡ Look at the shops. Have any of them opened or closed recently? ‡ Are there other reasons or is it a result of the business cycle . offices or factories in Witham.

U .The E.

Objectives W.L.I.U W.F:  You to answer the questions based on the European Union .L.T:  Understand the purpose of the European Union  Determine what has happened since the introduction of the E.A.

Starter Activity
‡ The face off quiz on www.businessstudiesonline.com where you answer a series of questions based on the E.U

What is the E.U?
‡ This is a political and economic community ‡ Made up of 27 countries member states located in Europe ‡ In 1957 6 European countries formed the European Economic Community (EEC) by the Treaty of Rome

What has happened since then?
‡ The EU has grown in size through new member states ‡ In 1993, the Maastricht Treaty established the base of the current legal framework

Task 1 ‡ Write down three things that you know about the E.U already ‡ One ‡ Two ‡ Three ‡ Compare answers and then list on board .

goods.The purpose of the E. agricultural and fisheries policies and a regional development policy . services and capital between member states ‡ It maintains a common trade policy.U ‡ The EU created a single market which seeks to guarantee the freedom of movement of people.

U has a greater influence on world events than the individual countries could have ‡ European Union regional development funding has improved conditions in the poorer countries and areas .Advantages of the EU ‡ Free Trade (no tariffs or quotas) benefits industries as they have a larger market to sell their goods to ‡ Greater co-operation between countries should prevent the outbreak of war between members ‡ Greater cultural understanding results from freedom to travel within the EU ‡ The E.

U funded schemes such as the Common Agricultural Policy. inefficient and sometimes corrupt ‡ It reduces the political independence of each country-decisions are taken for all countries by the European Parliament .U ‡ Goods cost more to import from non-EU countries due to tariffs ‡ E.Disadvantages of the E. are expensive.

U ‡ Draw arrows to link to the correct sequence of events ‡ Discuss with your partner and then draw in the arrows .Task Two ‡ Look at the handout regarding the history of the E.

The European Union .

Introduction of the euro ‡ In 1999 the EU introduced the euro ‡ Has been adopted by 13 member states .

businessstudiesonline.com ‡ The drag and drop section .Your task ‡ Name the country ‡ www.

Members of the E.U ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Czech Republic Poland France Albania Sweden Lativa Serbia Belgium ‡ ‡ ‡ ‡ ‡ ‡ ‡ Moldova Slovakia Estonia Iceland U.K Luxembourg Romania .

U ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Bulgaria Switzerland Greece Finland Ukraine Spain Ireland Hungary Austria Italy ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Lithuania Montenegro Slovenia Denmark Malta Belarus Netherlands Cyprus Norway Germany Potugal .Members of the E.

Business and the EU ‡ Has helped increase trade between member countries ‡ Businesses has the opportunity to expand ‡ The Eu has tried to protect businesses by imposing custom duties on goods imported into the EU .

U and the purpose of the E. On the poster include a small map of the E. the countries in the E. information about the E.U.U .Homework Essay (Red tasks) Why are more countries wanting to join the European Union/ What might their concerns be? Yellow tasks ‡ Create a poster about the European union.U.

K ‡ The E.Importance of the E. Germany.U ‡ The European Union contains four of the world·s major economic powers. Italy and the U.France.U is now the UK·s main market .

U.K imports in 2000 UK imports 2000 EU Rest of Europe North America Rest of the world The EU=58% Rest of Europe=6% North America=15% Rest of the world=21% .

U.K Exports in 2000 UK imports 2000 EU Rest of Europe North America Rest of the world The EU=54% Rest of Europe=7% North America=15% Rest of the world=24% .

The single market ‡ Promoting trade between the member states was a major influence in establishing the EU ‡ Its common market is now a single market consisting of about 400 million people .

Purpose of the single market ‡ Free movement of people (labour) ‡ Free movements of goods (no internal tariffs) ‡ Common technical and other standards .

How the single market has influenced UK businesses in several ways ‡ Common standards of quality and safety ‡ Open market encourages competition ‡ Free movement of labour and good encourages employment and skills development .

exchange rate fluctuations will have an impact and also price difference may cause problems .The monetary union ‡ Economic and monetary union is closely linked with the euro and eurozone ‡ The single currency will affect the EU: ‡ Trade will be valued in euros.

Your task ‡ In the EU what is the social charter? ‡ What is the difference between the eurozone and the euro? ‡ What does the EU·s single market seek to do? .

Answers ‡ A charter protecting the rights of workers ‡ Eurozone is the member states who have signed up to the single currency. The euro is the name of the single currency ‡ Provides free movement of labour and goods and establish common technical standards .

Plenary ‡ Test the person beside you regarding the true and false statements and see if their answers have changed .

F:  You to create a spider diagram outlining how businesses grow  You to participate and engage fully in lesson .Objectives W.L.A.I.L.T:  Determine how businesses grow  Discuss how businesses grow internally W.

Starter ‡ List ways that a business may grow ‡ Create a spider diagram to display these .

How a business grows ‡ There are several methods to measure an organisation·s size: ‡ Profits ‡ Turnover ‡ Employees ‡ Capital employed .

Profits and turnover ‡ Profits-how much the business keeps from selling its goods and services ‡ Turnover-the sales that the business makes .

Employees and capital employed ‡ Employees-the number of people employed in the business ‡ Capital employed-the resources the business has invested in it .

Key terms For a firm. greater size through growth makes: ‡ Economies of scale possible ‡ Survival more likely .

How can firms grow internally? ‡ They grow organically ‡ Can grow through mergers or takeovers ‡ This usually happens when an organisation sell more of its existing products. starts selling new products and when businesses enter new markets .

Integration ‡ In a merger two companies agree to join ‡ This external growth is the quickest way for organisations to grow ‡ In a takeover one company buys enough of another company·s voting shares to take control .

Economies of scale ‡ They are the reasons why the average cost of production may fall with increasing levels of output ‡ What is your opinion? Would it be a good idea for a company to produce in large amount or do you think they should only produce as needs be .

Task ‡ You own a small business and you want to ensure that your business provides the best possible service to their customers ‡ Create a questionnaire finding out if customers are happy with the service they are getting from your company .

Starter Activity Merger Takeover Turnover Retained profits Economies of scale The businesses own money that is ploughed back in If large amounts are made and it reduces the average cost When one company buys enough of another company·s voting shares Way of comparing a businesses size Takes place between two companies through their agreement .

Externalities ‡ All businesses bring benefits to people and others outside the business this is called externalities ‡ Externalities are costs or benefits arising from business activity that are experienced by people or organisations outside the firm .

Example ‡ A new housing developing is opening up in Witham ‡ They are aimed at people from deprived areas ‡ These people have been involved in crime and substance abuse ‡ You must outline the negative and positive externalities associated with this venture .

Your task ‡ Create a spider diagram showing the positive and negative externalities Positive Negative .

Year 10 Business Monday .

T:  Distinguish between imports and exports  Distinguish between visible and invisible trade W.L.I.F:  You to complete the starter activity  You to answer the questions based on importing and exporting .Objectives W.L.A.

Starter Activity Home Trade Importing Exporting Visible Trade Invisible The export and import of services Selling to other countries The import and export of goods Buying or selling to people in same country Buying from other countries .

Trading ‡ Is the buying and selling ‡ Home trade is when businesses buy or sell goods to people in the same country ‡ When businesses buy or sell from other countries outside the home country is foreign trading .

exporting ‡ When businesses buy goods or services from other countries is called importing ‡ When businesses sell goods or services to another country is called exporting .Importing vs.

clothes. machinery. oil. shoes are all examples of visible trade .Visible trade ‡ Is the export and import of goods ‡ Dairy produce. livestock.

Invisible trade
‡ Is the export and import of services ‡ When Americans or other foreign tourists come to the U.K on holidays, it is an example of invisible trade

Your task
‡ Outline on a spider diagram the reasons why the U.K imports and exports Exporting

Importing

Reasons for importing
‡ Climate is not suitable to produce all crops ‡ Lack natural resources ‡ Needs to import certain raw materials ‡ Wider choice

K to produce agricultural produce because of climate ‡ Businesses need more than the home market ‡ Creates extra employment ‡ Foreign currency .Reasons for exporting ‡ Easier for the U.

K imports goods from other countries ‡ Why do we export to other countries? .Task ‡ Explain the difference between home trade and foreign trade? ‡ Give three reasons why the U.

K business buying parts from China Imports .Task-tick the correct answer Exports U.K tourists going to Italy U.K computer parts sold to France An U.

Year 10 Business Wednesday .

Objectives W.I.A.L.T:  Distinguish between the various types of finance  Distinguish between ordinary and preference shares W.F:  You to attempt the starter activity  You to complete all the relevant task .L.

Starter Activity
‡ Why do businesses need finance? ‡ Give two examples of sources of finance ‡ Give two examples of each of the two finance types

Internal sources of finance
‡ Retained and using profits ‡ Selling assets ‡ Using trade credit ‡ Investing any surplus cash ‡ Reducing stocks held

External sources of finance
‡ Personal savings ‡ Borrowings ‡ Issuing shares ‡ Loans and mortgages ‡ Overdrafts ‡ Factoring debts

Types of shares ‡ Two types of shares-ordinary and preference ‡ Ordinary shares allow holders to vote at company meetings ‡ This makes an ordinary shareholder an owner of the company .

Preference shares ‡ These don·t usually give their holders the right to vote at company meetings ‡ Preference shareholders receive priority over ordinary shareholders when it comes to paying dividends and repaying capital .

Your task ‡ List three reasons why businesses need finance ‡ State two differences ordinary shares and preference shares .

re paid last Preference Usually nonvoting Fixed Paid before ordinary.repai d before ordinary .Ordinary and preference shares Ordinary Voting rights? Normally one per share Dividend Variable Payment? Capital Paid after repaid? preference.

Homework ‡ Red task-Choose a business of your choice and explain what source of finance would be most adequate for that business to grow ‡ Yellow task-Write a letter to a company of your choice explaining the difference between ordinary shares and preference shares (you must research) .

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