CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 82 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 82
Topic #: 1

Which of the following best describes the goal of WACC as a measure?

ATo work out the average return that is required by the company on its investments in order to satisfy all shareholders and debt holders.

BTo work out the average return that is required by the company on its investments in order to satisfy all shareholders.

CTo work out the average return that is required by the company on its investments in order to satisfy all debt holders.

DTo work out the minimum return that is required by the company on its investments in order to satisfy all shareholders and debt holders.

Show Suggested Answer

Suggested Answer: A

by Truman at Mar 06, 2024, 07:51 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Lorrie

5 months ago

I believe WACC aims to satisfy both shareholders and debt holders. Option D doesn't make sense because we want to meet the required return, not just the minimum.

upvoted 0 times

...

Mira

6 months ago

I'm not sure. I think it might be only about satisfying the shareholders. Maybe option B is correct?

upvoted 0 times

...

Maryann

6 months ago

I agree with Pamella. Option A seems to be the best description as it considers both shareholders and debt holders.

upvoted 0 times

...

Pamella

6 months ago

I think the goal of WACC is to calculate the average return required by the company for all shareholders and debt holders.

upvoted 0 times

...

Veronika

6 months ago

I still think option A is more accurate because it mentions the average return specifically.

upvoted 0 times

...

Becky

6 months ago

But what about option D? It mentions satisfying both shareholders and debt holders.

upvoted 0 times

...

Arthur

7 months ago

I agree with Veronika, option A makes sense.

upvoted 0 times

...

Veronika

7 months ago

I think the goal of WACC is to satisfy both shareholders and debt holders.

upvoted 0 times

...