QUESTION: 89

An entity has declared a dividend of $0.12 a share. The cum dividend market price of one equity share is $1.40.
Assuming a dividend growth rate of 7% a year, what is the entity's cost of equity?

17.0%
8.6%
16.2%
9.4%

Answer(s): A

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QUESTION: 90

Which TWO of the following are relevant ethical considerations when selecting an accounting policy?

It shows faithful representation of the financial statements.
It shows a favourable view of performance.
It is in accordance with International Financial Reporting Standards.
It is straightforward to implement.
It maximises shareholder wealth.

Answer(s): A,C

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QUESTION: 91

An accountant acting under their Code of Ethics would do which THREE of the following?

Resist pressure from the directors to recognise revenue on sales where the risks and rewards have not transferred to the customer.
Report material conflicts of interest to a more senior level.
Reject a justified change to a depreciation policy that increases profitability.
Accept a recommendation from the audit committee to increase segregation of duties within the finance department.
Make a provision for a liability of uncertain timing or amount, requested by the directors, where there is NOT a present obligation.
Accept a director's instruction to remove one element of their remuneration from the directors' remuneration report.

Answer(s): A,B,D

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