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CIMAPRA19-F03-1 Exam - Topic 7 Question 21 Discussion

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

Question #: 21
Topic #: 7

[All CIMAPRA19-F03-1 Questions]

Which of the following statements is true of a spin-off (or demerger)?

ARaises finance to fund new projects.

BChanges the ownership structure of the core entity by introducing new shareholders.

CAllows investors to identify the true value of the demerged business.

DIncreases the risk of a takeover bid for the core entity.

Show Suggested Answer

Suggested Answer: C

by Deonna at May 08, 2022, 03:15 PM

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Josue

11 months ago

Wait, can a spin-off really increase takeover risks? That seems surprising!

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Earnestine

11 months ago

Totally agree with B, new shareholders can change everything!

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Felton

11 months ago

Not sure about D, that sounds a bit exaggerated.

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Kayleigh

11 months ago

I think C is spot on! It really helps investors see the real value.

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Francine

11 months ago

Spin-offs can definitely raise finance for new projects.

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Hortencia

11 months ago

This question seems pretty straightforward. I think the key is to focus on what's most important to employees when it comes to talent development.

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Novella

12 months ago

Okay, let's think this through step-by-step. I need to calculate the absolute risk reduction between the two groups.

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