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Hello sir, as I were going through the questions, I could not figure out to write for this part of questions. My understanding as to answering the questions always have been preparing an answer for calculation and namely discussion requirements as per they are asked. However, in this question there are no specific requirements or keywords as to what to calculate and discuss about rather than just giving few words of feasibility and financial impacts of dividend policy. Later when checked the answer there were key topics covered such as gearing, dividends, share price. Likewise, how can I know what to prepare for answer where there is no such specific guidance in the question itself, but examiners still want certain topics to be covered?
There are clues in the wording of the scenario.
The first paragraph mentions a ‘fair wage’ campaign, and a government enquiry into low pay. This relates to the ethical issues – low wage rises but higher dividends and directors remuneration. This raises ethical issues.
The paragraph headed ‘dividend policy’ has much about whether the dividend policy can be maintained and therefore whether the annual report is telling the truth. This raises governance issues.
You do not need to make all the points made in the examiners answer in order to get the marks. but there is more than enough written in the scenario to be able to have a reasonable discussion about both the governance and ethical issues.
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