Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIMAPRA19-F03-1 Exam - Topic 1 Question 8 Discussion

The Board of Directors of a listed company is considering the company's dividend/retentions policy.The inflation rate in the economy is currently high and is expected to remain so for the foreseeable future.The board are unsure what impact the high level of inflation might have on the dividend policy.Which THREE of the following statements are true?
B) Consideration should be given to the fact that shareholders will have a desire for real growth in dividend. and C) Retained earnings for reinvestment will have to earn a return in excess of the inflation level. and D) The impact of inflation on the cash flows should be considered when formulating the dividend policy.
A) The high inflation rate does not need to be considered when determining the dividend policy.
E) In periods of high inflation 100% of earnings should always be paid out as dividends so that shareholders can protect their wealth against the impact of inflation.

CIMAPRA19-F03-1 Exam - Topic 1 Question 8 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 8
Topic #: 1
[All CIMAPRA19-F03-1 Questions]

The Board of Directors of a listed company is considering the company's dividend/retentions policy.

The inflation rate in the economy is currently high and is expected to remain so for the foreseeable future.

The board are unsure what impact the high level of inflation might have on the dividend policy.

Which THREE of the following statements are true?

Show Suggested Answer Hide Answer
Suggested Answer: B, C, D

by Evangelina at May 08, 2022, 09:11 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Joana
11 months ago
Retained earnings must outpace inflation, no doubt about it.
upvoted 0 times
...
Estrella
11 months ago
Wait, 100% payout during high inflation? That sounds risky!
upvoted 0 times
...
Peter
11 months ago
Shareholders will want real growth, that's a fact.
upvoted 0 times
...
Genevive
11 months ago
I disagree, dividends shouldn't be affected by inflation.
upvoted 0 times
...
Murray
11 months ago
Definitely need to consider inflation for dividends.
upvoted 0 times
...
Paola
11 months ago
The branding ethics part is tricky. I'll need to review the details on that to make sure I understand the implications.
upvoted 0 times
...
Malcom
11 months ago
I practiced a similar question, and I'm torn between discussing improvements and asking for explanations. Both seem reasonable to me.
upvoted 0 times
...
Skye
12 months ago
This looks like a straightforward question about XML and document querying. I'm pretty confident I know the answer, so I'll go with option C.
upvoted 0 times
...
Carylon
12 months ago
I think I read that the additional per-enrollee payment depends on referral costs. But does that mean jeopardizing her income at 25% risk? Need to sort out which option aligns with that.
upvoted 0 times
...

Save Cancel