Today we have a question relating to the new 2019 syllabus for F2.
The question was:
Calculate the cost of equity using the dividend valuation model:
A company has 1,000,000 shares in issue each with a par value of £1, currently trading for £12.50 per share and pays a constant dividend of £3.25.
This question relates to ‘A: Financing Capital Projects’ and is a slightly different version of the question in one of our free mock exams.
The correct answer was…
Ke = 3.25 / 12.50
Ke = 26.0%
For more free questions use our Free CIMA Mock Exams for the 2019 syllabus use the menu above to access our little shop, at the same time you’ll have the option to upgrade to our + package which includes 50% more CIMA Mock Exam style questions, feedback and both revision and timed assessment modes plus much more.