CIMAPRA19-F02-1 Exam - Topic 1 Question 5 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 5
Topic #: 1

[All CIMAPRA19-F02-1 Questions]

LM are just about to pay a dividend of 20 cents a share. Historically, dividends have grown at a rate of 5% each year.

The current share price is $3.05.

The cost of equity using the dividend valuation model is:

A12.4%

B11.9%

C7.4%

D6.9%

Show Suggested Answer

Suggested Answer: A

by Eladia at May 08, 2022, 11:08 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Rosenda

6 months ago

Historically, 5% growth is solid, but what's the market saying?

upvoted 0 times

...

Felice

6 months ago

Wait, how can the cost of equity be only 6.9%? That seems low!

upvoted 0 times

...

Vincent

6 months ago

I'm leaning towards 11.9%, seems reasonable.

upvoted 0 times

...

Elbert

6 months ago

I think the cost of equity is definitely higher than 7.4%.

upvoted 0 times

...

Julian

6 months ago

The dividend is 20 cents, and growth is 5%.

upvoted 0 times

...

Theola

7 months ago

This one seems straightforward. Receiving components only when needed should reduce inventory, so I'll go with D.

upvoted 0 times

...

Viva

7 months ago

Hmm, I'm a bit unsure about this one. I know WebLogic has a lot of configuration options, so I'll need to think through the different ways to set the deployment name.

upvoted 0 times

...