CIMA Exam CIMAPRA19-F02-1 Topic 5 Question 95 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 95
Topic #: 5

[All CIMAPRA19-F02-1 Questions]

The directors of AB want to reduce the entity's gearing ratio in the year to 31 December 20X9.

Which of the following independent actions could the directors take during 20X9 to achieve this?

ARecognise the valuation surplus on AB's property, plant and equipment.

BIssue cumulative preference shares.

CIssue redeemable preference shares.

DSwitch AB's fixed interest bearing borrowing to a lower variable rate borrowing.

Show Suggested Answer

Suggested Answer: A

by Isadora at Aug 24, 2024, 10:51 PM

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Vincent

1 months ago

Ah, the age-old dilemma: should I go with the safe and boring option, or take a chance on something more exciting? I'll have to think this one over with a nice cup of tea.

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Valentine

1 months ago

Wow, this is a tough one. I'm torn between A and D. Maybe I should just flip a coin and hope for the best!

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Fidelia

1 months ago

Redeemable preference shares? Sounds like a risky move. I think I'll play it safe and go with the variable rate borrowing.

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Cheryll

1 days ago

I agree, redeemable preference shares do seem risky. I would also go with the variable rate borrowing.

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2 months ago

I think option D could help reduce the gearing ratio.

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