9707_s10_ms_33 - UNIVERSITY OF CAMBRIDGE INTERNATIONAL...

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Unformatted text preview: UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS GCE Advanced Level MARK SCHEME for the May/June 2010 question paper for the guidance of teachers 9707 BUSINESS STUDIES 9707/33 Paper 33 (Case Study), maximum raw mark 100 This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes must be read in conjunction with the question papers and the report on the examination. CIE will not enter into discussions or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the May/June 2010 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses. Page 2 Mark Scheme: Teachers version Syllabus Paper GCE A LEVEL May/June 2010 9707 33 UCLES 2010 1 (a) Using data in Appendix A, calculate for both financial years 2009 and 2010: (i) The return on capital employed [3] RoCE = NP/CE 100 = 1 mark 2009 = 20% (200 1 000 100) 2010 = 15.15% (150 990 100) 2 marks for 1 correct ratio, 3 marks for both (ii) The dividend yield. [3] Dividend yield = Div per share/share price 100 = 1 mark 2009 = 10% (0.5 5 100) 2010 = 12.3% (0.43 3.5 100) 2 marks for 1 correct ratio, 3 marks for both (b) Would you advise Manuel to reduce the level of dividends more than proposed? Justify your answer. [10] Knowledge Application Analysis Evaluation Level 2 2 marks Good understanding shown 2 marks Well applied to case 43 marks Good use of theory or reasoned argument 2 marks Supported recommendation clearly given Level 1 1 mark Some knowledge shown 1 mark Some application to case 21 marks Limited use of theory or reasoning 1 mark Limited judgement shown Dividend yield up because of fall in share price this is not necessarily a good sign! Will share price fall further if dividends are further reduced? RoCE suggests that performance of business has declined do Directors want to reflect this in dividends or do they want to keep shareholder happy in short term hoping that performance will soon improve? Increasing retained profits and liquidity of the business by reducing dividends further could be a real benefit to the business BUT will it be wisely invested? If dividend yield remained at 10% i.e. $0.35 then SF would retain an extra $11.2m. Overall judgement may depend on how important it is to stop shareholders taking drastic action at the next AGM how likely is this? Page 3 Mark Scheme: Teachers version Syllabus Paper GCE A LEVEL May/June 2010 9707 33 UCLES 2010 2 Assuming Option A is chosen, evaluate the importance of effective planning and management of human resources to the success of this option. management of human resources to the success of this option....
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9707_s10_ms_33 - UNIVERSITY OF CAMBRIDGE INTERNATIONAL...

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