CIMA Exam CIMAPRA19-F03-1 Topic 6 Question 100 Discussion

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

Question #: 100
Topic #: 6

[All CIMAPRA19-F03-1 Questions]

Three companies are quoted on the New York Stock Exchange. The following data applies:

Which of the following statements is TRUE?

ACompany A has the greatest business risk

BCompanies A and B have the same capital structure

CCompanies A and C have the same business risk

DCompanies A and B have the same business risk

Show Suggested Answer

Suggested Answer: D

by Audrie at Sep 14, 2024, 08:29 AM

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Freida

8 months ago

D, the middle ground. Gotta love that Goldilocks approach to risk. Not too hot, not too cold.

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Selma

8 months ago

Hmm, C seems tempting. Business risk is where it's at. Volatility, the spice of life!

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Alyce

7 months ago

C) Companies A and C have the same business risk

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Denise

7 months ago

B) Companies A and B have the same capital structure

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Tiera

8 months ago

A) Company A has the greatest business risk

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Kenny

8 months ago

But look at the data, Company A has the highest beta which indicates higher business risk.

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Annamaria

8 months ago

I disagree, I believe the answer is A) Company A has the greatest business risk.

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Kenny

8 months ago

I think the answer is D) Companies A and B have the same business risk.

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Merlyn

8 months ago

B is the way to go, can't go wrong with equal capital structures. Balanced books, baby!

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Sylvia

7 months ago

D) Companies A and B have the same business risk

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Samuel

7 months ago

C) Companies A and C have the same business risk

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Gilbert

8 months ago

B) Companies A and B have the same capital structure

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Kristine

8 months ago

A) Company A has the greatest business risk

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Timothy

9 months ago

A for sure, look at that debt-to-equity ratio! Company A is playing with fire.

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Delisa

7 months ago

But Company C also has a high debt-to-equity ratio, so they might have similar business risk.

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Loreen

7 months ago

C) Companies A and C have the same business risk

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Suzan

7 months ago

I think you're right, that debt-to-equity ratio is pretty high for Company A.

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Lera

8 months ago

A) Company A has the greatest business risk

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