CIMA Financial Strategy F3 Question # 120 Topic 13 Discussion

CIMA Financial Strategy F3 Question # 120 Topic 13 Discussion

F3 Exam Topic 13 Question 120 Discussion:
Question #: 120
Topic #: 13

Company A has a cash surplus.

The discount rate used for a typical project is the company's weighted average cost of capital of 10%.

No investment projects will be available for at least 2 years.

 

Which of the following is currently most likely to increase shareholder wealth in respect of the surplus cash?


A.

Investing in a 2 year bond returning 5% each year.


B.

Investing in the local money market at 4% each year.


C.

Maintaining the cash in a current account.


D.

Paying the surplus cash as a dividend at the earliest opportunity.


Get Premium F3 Questions

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.