The dividend yield of ST has fallen in the year to 31 May 20X5, compared to the...

CIMA F2 Question Answer

The dividend yield of ST has fallen in the year to 31 May 20X5, compared to the previous year.

The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.

Which of the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?

The dividend paid in the year was reduced in order to pay for new assets.

Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.

The profit for the year fell significantly and the dividend per share stayed the same.

To compensate investors for the reduction in share price a higher dividend per share was paid.

CIMA F2 Summary

Price: $52.5 ~~$149.99~~