Free CIMAPRA17-BA1-1 Exam Braindumps (page: 24)

Page 24 of 118

Which ONE of the following is NOT required in calculating the EPS of ABC plc?

  1. The market price of ABC's share
  2. The number of shares ABC has in issue
  3. The most recent earnings after interest and tax of ABC
  4. The dividend payment made to holders of preference shares

Answer(s): A



Which of the following would lead to an increase in a firm's share price?

  1. Management announces that profits are still rising in line with the forecasts in its published 5 year plan
  2. Management announces that profits will be higher than had previously been forecast
  3. A rise in the rate of interest available from investing in government securities
  4. Management announces that new laws on working conditions have forced them to close a profitable factory earlier than had been expected

Answer(s): B



Which of the following best describes a project that has a negative Net Present Value?

  1. A loss making project
  2. A project that doesn't make enough profit to pay the interest on the money borrowed to invest in it
  3. A project that doesn't make sufficient returns to fully compensate investors for the funds they invest in it
  4. A project that will only start making profits after the present year has finished

Answer(s): C



Which of the following is not taken into account by the discount factor applied to future earnings when calculating shareholder value?

  1. Shareholders rate of time preference for money
  2. The amount of earnings that will be lost as taxation
  3. The amount of risk the investment is subject to
  4. The rate of inflation

Answer(s): B



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