[Oct 08, 2022] Free CIMA CIMAPRA19-F03-1 Exam Questions and Answer
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Learning guide CIMA F3: Financial Strategy Exam
Exam Blueprint of CIMA F3: Financial Strategy Exam
Tips to Prepare the exam in a short amount of time
In order to become a CIMA Professional, you must first become CIMA Operational certified. After completing this level, you may go on to the Top management and then the Strategic level to become a professional strategy to manage. Failure to comply with training standards is a major reason that many financial companies close their doors. Reflect this in your audit report. Application of CIMA F3: Financial Strategy Exam by using this guide will ensure your success in the exam and in the area of finance. Address the needs of a variety of users. You can start a small business or a large business, whatever you need to ensure financial success. Brings to life the subjects of accounting, mathematical logic and logical mathematics. To be effective in this area, you should know the three types of financial analysis. This guide will help you get started. CIMA F3 exam dumps You can learn the basics of accounting, cash flow statement. And the use of cash flow statement in preparation of financial statements, preparing balance sheet and income statement. Security Analysis and Financial Statement Analysis is a very important subject. Team work, skills at the most important.
In this course, you will be taught how to work as a team. Including the ability to make an independent decision. You can be confident in your work. Segments of this guide will include some of the basic management rules. Passsure who want to learn the basics of finance. This course will enhance your skills and make you more professional. Boring situations do not have a CIMA F3 exam. You can learn how to manage a shop or a business. Helps you to increase your skills, plus you can earn money while learning. Terms and conditions of business loans. This guide will include all the basic topics like customer service, how to keep your customers satisfied and coming back for more. Bundle includes a variety of topics that apply to business. In order to run a successful business. Comprehensive coverage of subjects in this course. You can apply what you've learned to be a professional. Special section of this guide covers the basic principles of Economics. You can learn the basics of business, you can know how to start earning money. Achievement of your objectives in this guide is to gain a fulfilling life through knowledge and experience.
NEW QUESTION 29
An entity prepares financial statements to 31 December each year. The following data applies:
1 December 20X0
* The entity purchased some inventory for $400,000.
* In order to protect the inventory against adverse changes in fair value the entity entered into a futures contract to sell the inventory for a fixed price on 31 January 20X1.
* The entity designated this contract as a fair value hedge of the value of the inventory.
31 December 20X0
* The inventory had a fair value of $480,000 and the futures contract had a fair value of $75,000 (a financial liability).
What will be the impact on the statement of profit or loss and other comprehensive income for the year ended 31 December 20X0 in respect of the change in the value of the inventory and the futures contract?
- A. A net gain of $5,000 will be recognised in profit or loss.
- B. A loss of $75,000 will be recognised in profit or loss.
- C. A net gain of $5,000 will be recognised in other comprehensive income.
- D. A loss of $75,000 will be recognised in other comprehensive income.
Answer: A
NEW QUESTION 30
A listed publishing company owns a subsidiary company whose business activity is training.
It wishes to dispose of the subsidiary company.
The following information is available:
The board of the publishing company believe that the value of the subsidiary company, and hence the value of the equity invested in it, can be determined by calculating the present value of the subsidiary's free cashflows.
Which of the following is the most appropriate discount rate to use when determining the enterprise value of the company?
- A. A WACC that the reflects the gearing of the publishing company and the equity beta factor of the publishing company.
- B. A cost of equity that reflects the asset beta of a listed company that provides training activities.
- C. A WACC that reflects the gearing of the publishing company and the asset beta of a listed company that provides training activities.
- D. A WACC that reflects the gearing of the subsidiary company and the asset beta of a listed company that provides training activities.
Answer: C
NEW QUESTION 31
A company's latest accounts show profit after tax of $20.0 million, after deducting interest of $5.0 million. The company expects earnings to grow at 5% per annum indefinitely.
The company has estimated its cost of equity at 12%, which is included in the company WACC of 10%.
Assuming that profit after tax is equivalent to cash flows, what is the value of the equity capital?
Give your answer to the nearest $ million.
Answer:
Explanation:
$ ? million
300, 300000000
NEW QUESTION 32
ZZZ wishes to borrow at a floating rate and has been told that it can use swaps to reduce the effective interest rate it pays. ZZZ can borrow floating at the risk-free rate + 1, and fixed at 10%.
Which of the following companies would be the most appropriate for ZZZ to enter into a swap with?
- A. Company DDA - it can borrow at risk-free rate + 1 Vz and fixed at 10.5%
- B. Company AAB - it can borrow floating at risk-free rate + % and fixed at 9.5%
- C. Company BBA - it can borrow floating at risk-free rate +VA and fixed at 12%
- D. Company CCA - it can borrow at risk-free rate + Y% and fixed at 9%
Answer: B,C,D
NEW QUESTION 33
The value of a call option will increase because of:
- A. An increase in the time to expiry.
- B. An increase in the strike price.
- C. A decrease in the market value of the share
- D. A decrease in the volatility of the share.
Answer: A
NEW QUESTION 34
A listed company is planning to raise $21.6 million to finance a new project with a positive net present value of $5 million. The finance is to be raised via a rights issue at a 10% discount to the current share price. There are currently 100 million shares in issue, trading at $2.00 each.
Taking the new project into account, what would the theoretical ex-rights price be?
Give your answer to two decimal places.
$ ?
- A. 2.02, 2.03
- B. 2.02, 1.03
Answer: A
NEW QUESTION 35
Company A, a listed company, plans to acquire Company T, which is also listed.
Additional information is:
* Company A has 100 million shares in issue, with market price currently at $8.00 per share.
* Company T has 90 million shares in issue,. with market price currently at $5.00 each share.
* Synergies valued at $60 million are expected to arise from the acquisition.
* The terms of the offer will be 2 shares in A for 3 shares in B.
Assuming the offer is accepted and the synergies are realised, what should the post-acquisition price of each of Company A's shares be?
Give your answer to two decimal places.
$ ? .
- A. 8.19, 8.18
- B. 8.19, 6.18
Answer: A
NEW QUESTION 36
A company has just received a hostile bid. Which of the following response strategies could be considered?
- A. Approach a White Knight
- B. Change the Articles of Association to amend voting rights
- C. Poison pill strategy
- D. Revalue non-current assets
Answer: A
NEW QUESTION 37
On 31 October 20X3:
* A company expected to agree a foreign currency transaction in January 20X4 for settlement on 31 March
20X4.
* The company hedged the currency risk using a forward contract at nil cost for settlement on 31 March
20X4.
* The transaction was correctly treated as a cash flow hedge in accordance with IAS 39 Financial Instruments: Recognition and Measurement.
On 31 December 20X3, the financial year end, the fair value of the forward contract was $10,000 (asset).
How should the increase in the fair value of the forward contract be treated within the financial statements for the year ended 31 December 20X3?
- A. A $10,000 profit will be recognised within the Income Statement.
- B. Not recognised in 20X3 as the forward contract is not settled until after the year end.
- C. A $10,000 profit will be recognised within other comprehensive income.
- D. Not recognised in 20X3 as the gain will be offset by a loss on the hedged transaction.
Answer: C
NEW QUESTION 38
A company plans to raise $12 million to finance an expansion project using a rights issue.
Relevant data:
* Shares will be offered at a 20% discount to the present market price of $15.00 per share.
* There are currently 2 million shares in issue.
* The project is forecast to yield a positive NPV of $6 million.
What is the yield-adjusted Theoretical Ex-Rights Price following the announcement of the rights issue?
- A. $11.00
- B. $16.00
- C. $9.00
- D. $14.00
Answer: B
NEW QUESTION 39
A project requires an initial outlay of $2 million which can be financed with either a bank loan or finance lease.
The company will be responsible for annual maintenance under either option.
The tax regime is:
* Tax depreciation allowances can be claimed on purchased assets.
* If leased using a finance lease, tax relief can be claimed on the interest element of the lease payments and also on the accounting depreciation charge.
The trainee management accountant has begun evaluating the lease versus buy decision and has produced the following data. He is not confident that all this information is relevant to this decision.
Using only the relevant data, which of the following is correct?
- A. The bank loan is $120,000 LESS expensive than the finance lease.
- B. The bank loan is $20,000 LESS expensive than the finance lease.
- C. The bank loan is $30,000 MORE expensive than the finance lease.
- D. The bank loan is $70,000 LESS expensive than the finance lease.
Answer: D
NEW QUESTION 40
Company A operates in country A with the AS as its functional currency. Company A expects to receive BS500.000 in 6 months' time from a customer in Country B which uses the B$.
Company A intends to hedge the currency risk using a money market hedge
The following information is relevant:
What is the AS value of the BS expected receipt in 6 months' time under a money market hedge?
- A. AS31, 790
- B. AS31, 482
- C. AS32, 532
- D. AS32, 051
Answer: D
NEW QUESTION 41
WX, an advertising agency, has just completed the all-cash acquisition of a competitor, YZ. This was seen by the market as a positive strategic move byWX.
Which THREE of the following will WX's shareholders expect the company's directors to prioritise following the acquisition?
- A. The development of a dividend policy to meet the expectations of the YZ's shareholders.
- B. The retention of YZ's key customers.
- C. The regulatory approval required to complete the acquisition.
- D. The realisation of anticipated post-acquisition synergies.
- E. The integration and retention of key employees of YZ.
Answer: C,D,E
NEW QUESTION 42
A company currently has a 6.25% fixed rate loan but it wishes to change the interest style of the loan to variable by using an interest rate swap directly with the bank.
The bank has quoted the following swap rate:
* 5.50% - 5.55% in exchange for LIBOR
LIBOR is currently 5%.
If the company enters into the swap and LIBOR remains at 5%, what will the company's interest cost be?
- A. 5.75%
- B. 5.00%
- C. 6.25%
- D. 5.70%
Answer: A
NEW QUESTION 43
A company intends to sell one of its business units. Company W, by a management buyout (MBO). A selling price of S200 million has been agreed.
The managers are discussing with a bank and a venture capital company (VCC) the following financing proposal.
The VCC requires a minimum return on its equity investment In the MBO of 35% a year on a compound basis over 5 years. What is the minimum total equity value of Company W in 5 years time in order to meet the VCC's required return? Give your answer to one decimal place.
- A. 0
- B. 1
Answer: B
NEW QUESTION 44
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