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

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Rosenda

4 months ago

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

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Felice

4 months ago

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

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Vincent

4 months ago

I'm leaning towards 11.9%, seems reasonable.

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Elbert

4 months ago

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

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Julian

5 months ago

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

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Theola

5 months ago

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

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Viva

5 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.

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