Independence Day Deal! Unlock 25% OFF Today – Limited-Time Offer - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

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

CIMA Exam CIMAPRA19-F03-1 Topic 5 Question 64 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 64
Topic #: 5
[All CIMAPRA19-F03-1 Questions]

A company has a cash surplus which it wishes todistributeto shareholders by a share repurchase rather than paying a special dividend.

WhichTHREEof the following statementsare correct?

Show Suggested Answer Hide Answer
Suggested Answer: C

by Tammara at Feb 04, 2023, 03:58 AM

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

Submit Cancel
Denae
2 months ago
This question is a real gem. I'm going to ace this exam and become the next Warren Buffett, or at least the next Robin Hood - stealing from the rich and giving to myself.
upvoted 0 times
Annelle
5 days ago
D) Different tax regimes could result in shareholders having a preference for a share repurchase due to the often more preferential tax treatment of capital gains.
upvoted 0 times
...
Julian
6 days ago
B) The share repurchase could send a negative signal to shareholders as it could be interpreted as a failure of management to find suitable investment opportunities.
upvoted 0 times
...
Luis
14 days ago
A) The payment of a special dividend could raise shareholders' expectations of similar distributions in the future, unlike a share repurchase.
upvoted 0 times
...
Kent
18 days ago
D) Different tax regimes could result in shareholders having a preference for a share repurchase due to the often more preferential tax treatment of capital gains.
upvoted 0 times
...
Jesusita
20 days ago
B) The share repurchase could send a negative signal to shareholders as it could be interpreted as a failure of management to find suitable investment opportunities.
upvoted 0 times
...
Yun
2 months ago
A) The payment of a special dividend could raise shareholders' expectations of similar distributions in the future, unlike a share repurchase.
upvoted 0 times
...
...
Dahlia
2 months ago
C is incorrect. Determining the repurchase price is not easy, as the company will likely need to consider various factors beyond the current market price.
upvoted 0 times
Alishia
1 months ago
B) The share repurchase could send a negative signal to shareholders as it could be interpreted as a failure of management to find suitable investment opportunities.
upvoted 0 times
...
Vi
2 months ago
A) The payment of a special dividend could raise shareholders' expectations of similar distributions in the future, unlike a share repurchase.
upvoted 0 times
...
...
Paz
2 months ago
I agree with Franklyn, option B makes sense. Share repurchases can indeed send a negative signal to shareholders.
upvoted 0 times
...
Catarina
2 months ago
B is also correct. A share repurchase could signal that the company lacks investment opportunities, which may worry some shareholders.
upvoted 0 times
Marleen
26 days ago
B is also correct. A share repurchase could signal that the company lacks investment opportunities, which may worry some shareholders.
upvoted 0 times
...
Aaron
1 months ago
D) Different tax regimes could result in shareholders having a preference for a share repurchase due to the often more preferential tax treatment of capital gains.
upvoted 0 times
...
Andra
2 months ago
B) The share repurchase could send a negative signal to shareholders as it could be interpreted as a failure of management to find suitable investment opportunities.
upvoted 0 times
...
Edgar
2 months ago
A) The payment of a special dividend could raise shareholders' expectations of similar distributions in the future, unlike a share repurchase.
upvoted 0 times
...
...
Jill
2 months ago
A, D, and E are correct. The share repurchase allows the company to distribute cash without raising shareholders' expectations for future payouts. It also offers tax advantages compared to a special dividend in some cases. And the repurchase is binding on all shareholders, not just those who participate.
upvoted 0 times
...
Franklyn
3 months ago
I disagree, I believe option B is correct as a share repurchase could signal a lack of investment opportunities.
upvoted 0 times
...
Ma
3 months ago
I think option A is correct because shareholders may expect more dividends in the future.
upvoted 0 times
...

Save Cancel