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CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 69
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

The dividend yield of ST hasfallen in theyear to 31 May 20X5, compared to the previous year.

The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.

Whichof the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?

Show Suggested Answer Hide Answer
Suggested Answer: D

by Eun at Apr 22, 2023, 06:30 PM

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Linwood
2 months ago
Option A seems plausible, but the question states there were no issues of share capital, so that's not the reason for the reduced dividend yield.
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Gilma
21 days ago
C) The profit for the year fell significantly and the dividend per share stayed the same.
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Lisandra
25 days ago
B) Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
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Valene
1 months ago
A) The dividend paid in the year was reduced in order to pay for new assets.
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Doug
2 months ago
Haha, option B sounds like a dream scenario - using 'surplus cash' to pay a special dividend. If only all companies were that generous!
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Sheridan
5 days ago
User 3: It would definitely make investing more rewarding.
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Enola
6 days ago
User 2: Yeah, that would be a dream scenario for investors.
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Suzi
7 days ago
User 1: I wish all companies were as generous as option B, using surplus cash for special dividends.
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Sueann
2 months ago
I was tempted to go with option D, but the information provided clearly indicates that the share price fell, so a higher dividend per share is unlikely to be the reason.
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Chi
3 hours ago
B) Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
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Olen
1 days ago
A) The dividend paid in the year was reduced in order to pay for new assets.
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Nada
3 days ago
C) The profit for the year fell significantly and the dividend per share stayed the same.
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Bobbye
25 days ago
B) Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
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Jolanda
2 months ago
A) The dividend paid in the year was reduced in order to pay for new assets.
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Cecilia
2 months ago
The correct answer is C) The profit for the year fell significantly and the dividend per share stayed the same. The lower share price and no change in dividend per share would naturally result in a lower dividend yield.
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Markus
2 months ago
User 2: That makes sense, since the dividend yield is calculated based on the dividend per share and the share price.
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Carma
2 months ago
User 1: I think the answer is C) The profit for the year fell significantly and the dividend per share stayed the same.
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Kenneth
3 months ago
But wouldn't a special dividend increase the dividend yield?
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Rutha
3 months ago
I disagree, I believe it's B.
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Kenneth
3 months ago
I think the answer is C.
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