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Exam F3 All Questions
Exam F3 All Questions

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CIMA Strategic F3 Question # 29 Topic 4 Discussion

F3 Exam Topic 4 Question 29 Discussion:
Question #: 29
Topic #: 4

A company is planning a new share issue.

The funds raised will be used to repay debt on which it is currently paying a high interest rate.

Operating profit and dividends are expected to remain unchanged in the near future.

If the share issue is implemented, which THREE of the following are most likely to increase?


A.

The cost of equity


B.

The number of shares in issue


C.

Next year's payment of corporate income tax


D.

The gearing (book value of debt as a percentage of the book value of equity + debt)


E.

Interest cover


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