kaplan exam kit Q.1

If ever you are asked for the total shareholder return, then you always base it on the share price at the start of the year.

I know it seems odd – dividend yield on its own is calculate on the share price at the end of the year – but total shareholder return is always on the value at the start of the year.

With regard to the discussion parts.
Part (c) is fairly text book learning – you should be able to identify three stakeholders. Kaplan’s answer has chosen the local community, customers, and the government. (You could instead have chosen suppliers and/or lenders.) This could be asked in any question and so you should learn stakeholders.

Part (d) requires a little more thought (and is not text book learning). The clue in the question is that it is a water supply company that was privatised a few years ago. The examiner does not waste words, and for the rest of the question the first sentence of the question was not relevant – it is therefore only there for part (d) of the question.

Once you have realised that you should be able to think of some ideas.
For example, the government will want to make sure that the quality of the water is good. The government will also likely regulate the prices (this is a bit specific to the UK, but where there are few suppliers then the state wants to try and make sure that people are not over charged. The treatment of water might cause pollution and so that is another area that might be subject to government intervention.

Although for the calculation parts of the F9 questions, a lot of the wording in the question is not relevant, it is there for a reason.
So as soon as you see a written part that is not something you have learned from a text book, then go back and read the wording of the question – the clues will be there 🙂

You are welcome 🙂