CIMA Exam CIMAPRA19-F03-1 Topic 6 Question 86 Discussion

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

Question #: 86
Topic #: 6

[All CIMAPRA19-F03-1 Questions]

Ais a listed company. Its shares trade on a stock market exhibiting semi-strong form efficiency.

Which of the following is most likely to increase thewealth of A's shareholders?

AAnnouncing that a project will be undertaken generating a positive net present value.

BAnnouncing that the final dividend willremain unchanged from the previous 3 years.

CAnnouncing that a non-current asset will be revalued in the statement of financial position.

DAnnouncing that inventory will be impaired.

Show Suggested Answer

Suggested Answer: A, B, D

by Leanora at May 13, 2024, 07:13 PM

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Solange

5 days ago

Impairment of inventory? That's just a fancy way of saying 'we messed up our purchases.' Not a winner.

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Lenora

7 days ago

Revaluing a non-current asset? That's just accounting trickery, not actual value creation.

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Louisa

8 days ago

Keeping the dividend unchanged? Yawn. That's not going to move the needle at all.

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Tequila

14 days ago

I see your points, but I think option B is also a good choice. Keeping the dividend unchanged can signal stability and attract more investors, ultimately increasing shareholder wealth.

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Willodean

17 days ago

Announcing a project with positive NPV is definitely the way to go! That's a no-brainer for increasing shareholder wealth.

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Leigha

18 days ago

I disagree, I believe option C is the most likely to increase wealth. Revaluing a non-current asset can lead to higher asset values and ultimately increase shareholder wealth.

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Thora

19 days ago

I think option A is the best choice. It will increase the wealth of shareholders by generating positive net present value.

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