Edexcel GCSE Business Paper 2 1.1 Business Growth

Which of the following is an example of internal (organic) business growth?

• Merging with another company

• Launching new products through research and development

• Taking over a competitor

• Issuing new shares on the stock market

What is a public limited company (plc)?

• A business owned by the government

• A company whose shares are traded publicly on the stock market

• A business owned by a single individual

• A company that cannot raise capital externally

Which of the following is an internal source of finance for a business?

• Loan capital

• Share capital

• Retained profit

• Stock market flotation

Why might a business change its ownership structure from a private limited company to a public limited company?

• To reduce the number of owners

• To limit its growth potential

• To raise more capital for growth

• To avoid selling assets

A business is considering expanding overseas by taking advantage of new technology. Which type of growth does this represent?

• Internal (organic) growth

• External (inorganic) growth

• Public growth

• Financial growth

Explain one reason why a business might choose to grow externally through a merger or takeover rather than internally.

• It is always cheaper than internal growth

• It allows for immediate access to new markets or resources

• It does not require any financial investment

• It guarantees success in all cases

Which of the following best describes internal growth for a business?

• A business grows organically through innovation and attracting new customers.

• A business grows by acquiring another company.

• A business merges with another to form a larger organization.

• A business raises finance by selling shares.

What is a merger in the context of business growth?

• When a business grows by launching new products.

• When one company acquires another company.

• An agreement between owners of two businesses to create one larger organization.

• When a company becomes listed on a stock market.

Which of the following is a characteristic of a public limited company (Plc)?

• It is a small business owned by one person.

• It has shares publicly traded on a stock market.

• It only operates in the private sector.

• It cannot raise finance through share capital.

When a company does a stock market flotation, what has that company done?

• Merged with another business.

• Acquired a majority stake in another company.

• Issued shares to be sold publicly to raise capital.

• Innovated with products through research and development.