3.6 How might a portfolio manager interpret the financial implications of TTN agreeing to offer
contractors the same working conditions as employees?( V3 Mock#37)
A. Cost increases in the short and long-term, and lower share price volatility due to reduced
risk of labour disruption
B. Potential financial implications cannot be estimated without the company disclosing the
change to contractors'salaries.
C. Only employees'salary and working conditions impact the company, hence costs and
risks remain the same.
D. The cost of capital is increased in the financial model as a result of providing greater
labour rights to contractors.
Correct Answer: A
