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CIMAPRA19-F02-1 Exam - Topic 1 Question 69 Discussion

The dividend yield of ST hasfallen in theyear to 31 May 20X5, compared to the previous year.The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.Whichof the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?
D) To compensate investors for thereduction in share price a higher dividend per share was paid.
A) The dividend paid in the year was reduced in order to pay for new assets.
B) Surplus cash was used to pay a special dividend in additionto the normal dividend in the year.
C) The profit for the year fell significantly and the dividend per share stayed the same.

CIMAPRA19-F02-1 Exam - Topic 1 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 69
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

The dividend yield of ST hasfallen in theyear to 31 May 20X5, compared to the previous year.

The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.

Whichof the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?

Show Suggested Answer Hide Answer
Suggested Answer: D

by Eun at Apr 22, 2023, 06:30 PM

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Derrick
8 months ago
Surprised to see the yield fall with no capital issues!
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Hyun
9 months ago
Wait, how can the dividend yield drop if they paid a higher dividend?
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Brande
9 months ago
I think option C makes the most sense here.
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Lavina
9 months ago
Definitely a sign of reduced dividends.
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Eliseo
9 months ago
The share price dropped from $4.50 to $4.00.
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Youlanda
9 months ago
I feel like option D is unlikely since it says they paid a higher dividend to compensate for the drop in share price, which doesn't really fit the context of a falling yield.
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Jamey
9 months ago
I’m a bit confused about option A. If they reduced the dividend to pay for new assets, wouldn’t that usually lead to a lower yield too?
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Kris
9 months ago
I think option C makes sense because if profits fell but dividends stayed the same, the yield would drop. That sounds familiar from practice questions.
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Chandra
10 months ago
I remember studying how a decrease in share price can affect dividend yield, but I'm not sure which option explains it best.
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Kate
10 months ago
This looks like a straightforward question about the Search & Reporting App. I'll start by reading through the options carefully and checking off the ones that seem correct.
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Ty
10 months ago
I'm pretty confident that option A is the best definition here. It captures the key idea of assigning usage rights, which is what software allocation is all about.
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Horace
10 months ago
I'm a bit confused by the wording of these options. I'll need to re-read them carefully to make sure I understand what each one is asking about.
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Page
10 months ago
Hmm, I'm a bit unsure about this one. The options don't seem very clear to me. I'll need to review my notes on Cisco IOS XE configuration to make sure I understand the right command for enabling application hosting.
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Linwood
1 year ago
Option A seems plausible, but the question states there were no issues of share capital, so that's not the reason for the reduced dividend yield.
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Gilma
1 year ago
C) The profit for the year fell significantly and the dividend per share stayed the same.
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Lisandra
1 year ago
B) Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
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Valene
1 year ago
A) The dividend paid in the year was reduced in order to pay for new assets.
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Doug
1 year ago
Haha, option B sounds like a dream scenario - using 'surplus cash' to pay a special dividend. If only all companies were that generous!
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Sheridan
1 year ago
User 3: It would definitely make investing more rewarding.
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Enola
1 year ago
User 2: Yeah, that would be a dream scenario for investors.
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Suzi
1 year ago
User 1: I wish all companies were as generous as option B, using surplus cash for special dividends.
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Sueann
1 year ago
I was tempted to go with option D, but the information provided clearly indicates that the share price fell, so a higher dividend per share is unlikely to be the reason.
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Ayesha
1 year ago
C) The profit for the year fell significantly and the dividend per share stayed the same.
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Chi
1 year ago
B) Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
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Olen
1 year ago
A) The dividend paid in the year was reduced in order to pay for new assets.
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Nada
1 year ago
C) The profit for the year fell significantly and the dividend per share stayed the same.
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Bobbye
1 year ago
B) Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
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Jolanda
1 year ago
A) The dividend paid in the year was reduced in order to pay for new assets.
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Cecilia
1 year ago
The correct answer is C) The profit for the year fell significantly and the dividend per share stayed the same. The lower share price and no change in dividend per share would naturally result in a lower dividend yield.
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Markus
1 year ago
User 2: That makes sense, since the dividend yield is calculated based on the dividend per share and the share price.
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Carma
1 year ago
User 1: I think the answer is C) The profit for the year fell significantly and the dividend per share stayed the same.
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Kenneth
1 year ago
But wouldn't a special dividend increase the dividend yield?
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Rutha
1 year ago
I disagree, I believe it's B.
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Kenneth
1 year ago
I think the answer is C.
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