Skip to content

ACCA Applied Knowledge · Business and Technology · Stakeholders in business organisations

Which of the following is most likely to be the primary objective of a bank that has lent money to a company?

A lending bank's primary objective is to receive interest and have the loan repaid on time. It therefore focuses on the company's cash flow, gearing and security, rather than dividends, product prices or employee representation.

  1. AReceiving interest and repayment of the loan on timeCorrect
  2. BMaximising the company's dividend payments
  3. CObtaining the lowest possible price for the company's products
  4. DSecuring a seat on the company's board for employees

Explanation

Lenders are concerned with the company's ability to pay interest and repay capital when due, so they focus on liquidity, gearing and security. Dividends benefit shareholders, and indeed may conflict with lenders' interest in retaining cash. Product prices and employee board seats are not lender objectives.

Did you get it right without looking?

One question tells you little. A timed set on Stakeholders in business organisations shows your real accuracy, how long you take and where you lose marks.

Practise Stakeholders in business organisationsFree diagnostic mock

More Stakeholders in business organisations questions