CIMA Exam CIMAPRA19-F02-1 Topic 3 Question 104 Discussion

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

Question #: 104
Topic #: 3

W and Y are very similar entities with the same level of profit before interest and tax. However, W has gearing of 95% and Y has gearing of 30%.

Which of the following statements is true?

AInvesting in W carries a higher level of risk than investing in Y.

BA greater proportion of profit will be available out of which to declare a dividend in W.

CInvestors in Y will expect a higher return than investors in W.

DY has a greater commitment to meet interest payments than W.

Show Suggested Answer

Suggested Answer: A, B, C, D

by Yuriko at Dec 07, 2024, 02:32 AM

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2 days ago

I disagree, I believe a greater proportion of profit will be available out of which to declare a dividend in W.

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6 days ago

I think investing in W carries a higher level of risk than investing in Y.

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