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CIMA Financial Strategy F3 Question # 38 Topic 4 Discussion

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CIMA Financial Strategy F3 Question # 38 Topic 4 Discussion

F3 Exam Topic 4 Question 38 Discussion:
Question #: 38
Topic #: 4

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.

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Actual exam question for CIMA F3 exam by Jett2885 at Dec 17, 2025, 9:29:20 AM

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