CIMA Exam CIMAPRA19-F03-1 Topic 5 Question 82 Discussion

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

Question #: 82
Topic #: 5

A company is planning a new share issue.

The funds raised will be used to repay debt on which it is currently paying a high interest rate.

Operating profit and dividends are expected to remain unchanged in the near future.

If the share issue is implemented, which THREE of the following are most likely to increase?

AThe cost of equity

BThe number of shares in issue

CNext year's payment of corporate income tax

DThe gearing (book value of debt as a percentage of the book value of equity + debt)

EInterest cover

Show Suggested Answer

Suggested Answer: B, C, D

by Sylvia at Mar 16, 2024, 07:10 PM

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