CIMAPRA19-F03-1 Exam - Topic 4 Question 17 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 17
Topic #: 4

Acompany'sgearingis well below its optimal level and therefore it is considering implementing a share re-purchase programme.

This programme will be funded from the proceeds of aplannednew long-term bond issue.

Its financial projectionsshow no change to next year'sexpectedearnings.

As a result, the companyplans to pay the same total dividend in future years.

If the sharere-purchase is implemented, whichTHREEof the following measures are most likely to decrease?

AThe Weighted Average Cost of Capital

BThe cost of equity

CThe interest cover

DNext year's dividend per share

EThe gearing, based on book value (debt (debt + equity))

FThe number of shares in issue

Show Suggested Answer

Suggested Answer: A, C, F

by Cecil at May 07, 2022, 06:46 AM

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5 months ago

The cost of equity will likely decrease.

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I'm a little confused by this question. The deployment is forecasted to need 256 GB, but the options include 512 GB, 1 TB, and 2 TB. Does that mean the minimum amount that can be allocated is actually higher than 256 GB? I'll have to re-read the question carefully and think about it some more.

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Raul

5 months ago

This seems like a pretty straightforward Scrum question. I'd probably start by reviewing the Scrum framework and the responsibilities of the Scrum Master.

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CIMAPRA19-F03-1 Exam - Topic 4 Question 17 Discussion

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