CIMA Financial Strategy F3 Question # 12 Topic 2 Discussion

CIMA Financial Strategy F3 Question # 12 Topic 2 Discussion

F3 Exam Topic 2 Question 12 Discussion:
Question #: 12
Topic #: 2

A company is deciding whether to offer a scrip dividend or a cash dividend to its shareholders. 

Although the company has excellent long-term growth prospects, it is experiencing short-term profit and cash flow problems.

 

Which of the following statements is most likely to be a reason for choosing the scrip dividend?


A.

It is a way of raising additional finance to promote future growth.


B.

It is a way of increasing earnings per share.


C.

It is a way of encouraging shareholders to allow cash to be retained in the business.


D.

It is a way of increasing dividend per share.


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