346 Q&As in UPDATED CIMAPRA19-F03-1 Exam Questions Certification Test Engine to PDF
Get The Important Preparation Guide With CIMAPRA19-F03-1 Dumps
Difficulty in taking the CIMA F3: Financial Strategy Exam
If you want to pass your exam with an average score of at least 85%, you may trust our highly educated specialists. CIMA F3 exam dumps are the quickest way to study and pass the CIMA F3 exam. Every week, we review the CIMA F3 exam questions and answers to make sure they are up-to-date. Leader of the finance industry. The most frequently asked questions and answers about the CIMA exam. Authorized services to help you pass the exam. Study materials for the CIMA F3 exam. The CIMA F3 exam is very important for your career. Inavailable exam materials. Preparatory material that is necessary for the CIMA F3 exam. Study material that will help you prepare for the CIMA F3 exam. License holder of the CIMA F3 exam. You can trust our exam material. Our site has a wealth of study material for the CIMA F3 exam. We're committed to serving you. Grades you will get on the CIMA F3 exam. The best way to prepare for the CIMA F3 exam. Active CIMA F3 certification program. We provide all of the CIMA exam questions and answers. Compiled for the CIMA F3 exam. Most of the test takers want to pass the test. Devised CIMA F3 exam material. Internet access is required to register for the exam. Appearing in the CIMA F3 exam. CIMA exam questions and answers are important.
The CIMA F3 certification is extensive and requires a lot of preparation. Talk to the CIMA exam officer. The CIMA F3 exam is tough, but it's doable if you study the materials well. Entry requirements for the CIMA F3 exam. Advertisement on the CIMA exam website. The CIMA F3 exam is very hard, but it's doable if you study the materials well. Engineering students are eligible to get the CIMA F3 exam. Code of conduct in the CIMA F3 exam. The website is in the process of being updated to provide you with the most up-to-date information. Total number of CIMA F3 certifications issued in the last year. Saved CIMA F3 exam questions and answers. Designed for mobile devices. Complete coverage of the CIMA F3 exam. Absolutely essential CIMA F3 exam questions. Correct and updated information. You can pass the exam by applying what you've learned. Rewarding CIMA F3. The CIMA F3 exam can be taken online or offline. Concepts and requirements of the CIMA F3 exam. Preparing for the CIMA F3 exam is not easy. Contact us if you have specific questions. Drag and drop page is the easiest way to access the CIMA F3 exam. Our experts will send you an email with complimentary materials.
For more information visit
NEW QUESTION 58
Which THREE of the following statements are true of a money market hedge?
- A. They are more complex than forward contracts.
- B. They are easy to set up.
- C. They offer roughly the same outcome as a forward contract.
- D. They may be a little more flexible in comparison to a forward contract.
- E. They leave the company exposed to currency risks.
Answer: A,C,E
NEW QUESTION 59
A wholly equity financed company has the following objectives:
1. Increase in profit before interest and tax by at least 10% per year.
2. Maintain a dividend payout ratio of 40% of earnings per year.
Relevant data:
* There are 2 million shares in issue.
* Profit before interest and tax in the last financial year was $5 million.
* The corporate income tax rate is 30%.
At the beginning of the current financial year, the company raised long term debt of $2 million at 10% interest each year.
Calculate the dividend per share that will be announced this year assuming the company achieves its objective of increasing profit before interest and tax by 10%.
- A. $0.67
- B. $0.74
- C. $1.11
- D. $1.01
Answer: B
NEW QUESTION 60
HHH Company has a fixed rate loan at 10.0%, but wishes to swap to variable. It can borrow at the risk-free rate +8%. The bank is currently quoting swap rates of 3.1% (bid) and 3.5% (ask). What net rate will HHH Company pay if it enters into the swap?
- A. Risk-free rate +6.9%
- B. Risk-free rate+3.1%
- C. Risk-free rate +6.5%
- D. Risk-free rate +8%
Answer: B
NEW QUESTION 61
Company A is planning to acquire Company B by means of a cash offer. The directors of Company B are prepared to recommend acceptance if a bid price can be agreed. Estimates of the net present value (NPV) of future cash flows for the two companies and the combined group post acquisition have been prepared by Company A's accountant. There are as follows:
What is the maximum price that Company A should offer for the shares in Company B?
Give your answer to the nearest $ million
- A. 0
- B. 1
Answer: A
Explanation:
NEW QUESTION 62
A company is deciding whether to offer a scrip dividend or a cash dividend to its shareholders.
Although the company has excellent long-term growth prospects, it is experiencing short-term profit and cash flow problems.
Which of the following statements is most likely to be a reason for choosing the scrip dividend?
- A. It is a way of increasing earnings per share.
- B. It is a way of raising additional finance to promote future growth.
- C. It is a way of increasing dividend per share.
- D. It is a way of encouraging shareholders to allow cash to be retained in the business.
Answer: D
NEW QUESTION 63
A company's annual dividend has grown steadily at an annual rate of 3% for many years. It has a cost of equity of 11%. The share price is presently $64.38.
The company is about to announce its latest dividend, which is expected to be $5.00 per share.
The Board of Directors is considering an attractive investment opportunity that would have to be funded by reducing the dividend to $4.50 per share. The board expects the project to enable future dividends to grow by
5% every year and the cost of equity to remain unchanged.
Calculate the change in share price, assuming that the directors announce their intention to proceed with this investment opportunity.
Give your answer to 2 decimal places.
$ ?
Answer:
Explanation:
14.37
NEW QUESTION 64
The Board of Directors of a small listed company engaged in exploration are currently considering the future dividend policy of the company. Exploration is considered a high-risk business and consequently the company has a low level of debt finance.
Forecasts indicate a period of profit fluctuation in the next few years as the company is planning to embark on a major capital investment project. Debt finance is unlikely to be available due to the project's high business risk.
Which THREE of the following are practical considerations when determining the company's dividend/retention policy?
- A. The general level of interest rates and the tax savings on interest costs relating to debt finance.
- B. The fluctuating nature of the projected future profits.
- C. The timing and size of the cash flow requirements for the new investment.
- D. The legislation and regulation governing distributable profits.
- E. The dividend policies of mature listed multinational companies in the exploration industry.
Answer: B,C,D
Explanation:
Discursive_F0
NEW QUESTION 65
Company A plans to acquire Company B in a 1-for-1 share exchange.
Pre-acquisition information is as follows:
Post-acquisition information is as follows:
Annual earnings are expected to increase by $4 million.
The P/E multiple of the combined company is expected to be 12 times.
If the acquisition proceeds, what is the expected percentage increase in the post acquisition share price of Company A?
- A. 50%
- B. 0%
- C. 8%
- D. 6%
Answer: B
NEW QUESTION 66
Company B is an all equity financed company with a cost of equity of 10%.
It is considering issuing bonds in order to achieve a gearing level of 20% debt and 80% equity.
These bonds will pay a coupon rate of 5% and have an interest yield of 6%.
Company B pays corporate tax at the rate of 25%.
According to Modigliani and Miller's theory of capital structure with tax, what will be Company B's new cost of equity?
A)
B)
C)
D)
- A. Option C
- B. Option A
- C. Option D
- D. Option B
Answer: D
NEW QUESTION 67
A company is financed by debt and equity and pays corporate income tax at 20%.
Its main objective is the maximisation of shareholder wealth.
It needs to raise $200 million to undertake a project with a positive NPV of $10 million.
The company is considering three options:
* A rights issue.
* A bond issue.
* A combination of both at the current debt to equity ratio.
Estimations of the market values of debt and equity both before and after the adoption of the project have been calculated, based upon Modigliani and Miller's capital theory with tax, and are shown below:
Under Modigliani and Miller's capital theory with tax, what is the increase in shareholder wealth?
- A. $160 million if financed by a mixture of debt and equity
- B. $50 million if financed by debt
- C. $210 million if financed by equity
- D. $10 million irrespective of finance
Answer: B
NEW QUESTION 68
XYZ is a multi-national group with subsidiary AA in Country A and subsidiary BB in Country B.
The capital structures of AA and BB are set up to take advantage of the lower tax rate in Country A Thin capitalisation rules in Country B will limit the ability for either AA or BB to claim tax relief on:
- A. interest earned by BB.
- B. interest earned by AA
- C. interest paid by AA
- D. interest paid by BB
Answer: D
NEW QUESTION 69
A company is currently all-equity financed with a cost of equity of 9%.
It plans to raise debt with a pre-tax cost of 3% in order to buy back equity shares.
After the buy-back, the debt-to-equity ratio at market values will be 1 to 2.
The corporate income tax rate is 25%.
Which of the following represents the company's cost of equity after the buy-back according to Modigliani and Miller's Theory of Capital Structure with taxes?
- A. 18%
- B. 11.3%
- C. 11.5%
- D. 90%
Answer: C
NEW QUESTION 70
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.
$ ? .
Answer:
Explanation:
8.19, 8.18
NEW QUESTION 71
A company has a cash surplus which it wishes to distribute to shareholders by a share repurchase rather than paying a special dividend.
Which THREE of the following statements are correct?
- A. Determination of the repurchase price will be easy as shareholders will insist on receiving the open market price.
- B. The payment of a special dividend could raise shareholders' expectations of similar distributions in the future, unlike a share repurchase.
- C. The share repurchase, if approved by the shareholders, will be binding on all of the company's shareholders.
- D. The share repurchase could send a negative signal to shareholders as it could be interpreted as a failure of management to find suitable investment opportunities.
- E. Different tax regimes could result in shareholders having a preference for a share repurchase due to the often more preferential tax treatment of capital gains.
Answer: B,D,E
NEW QUESTION 72
A company has convertible bonds in issue.
The following debt is apply (31 December 20X0):
* Conversion ratio- 20 shares for each $130 bond.
* Current share price - $4 50
* Expected annual growth in share price - 5%
Advise the bond Holder at which date the convers on would be worthwhile?
- A. 31 December 20X1
- B. 31 December 20X2
- C. 31 December 20X3
- D. 31 December 20X0
Answer: C
NEW QUESTION 73
Using the CAPM, the expected return for a company is 10%. The market return is 7% and the risk free rate is
1%.
What does the beta factor used in this calculation indicate about the risk of the company?
- A. It has greater risk than the average market risk.
- B. It is not possible to tell from CAPM.
- C. It has the same risk as the average market risk.
- D. It has lower risk than the average market risk.
Answer: A
NEW QUESTION 74
Company A is planning to acquire Company B. Both companies are listed and are of similar size based on market capitalisation No approach has yet been made to Company B's shareholders as the directors of Company A are undecided about the most suitable method of financing the offer Two methods are under consideration a share exchange or a cash offer financed by debt.
Company A currently has a gearing ratio (debt to debt plus equity) of 30% based on market values. The average gearing ratio (debt to debt plus equity) for the industry is 50% Although no formal offer has been made there have been market rumours of the proposed bid. which is seen as favorable to Company A.
As a consequence. Company As share price has risen over the past few weeks while Company B's share price has fallen.
Which THREE of the following statements are most likely to be correct?
- A. Based on current share price movements, a share exchange would mean Company A has to issue fewer shares to acquire Company B than it would have done a few weeks ago
- B. Company A's gearing will increase following a share exchange.
- C. Company B's shareholders will be able to participate in the future growth of the combined business if it is a share exchange
- D. The method of finance chosen will not affect the post-acquisition earning per share of the combined business
- E. Company A's weighted average cost of capital will fall if financing is with debt
Answer: A,E
NEW QUESTION 75
Company A has made an offer to acquire Company Z.
Both companies are quoted and their current market share prices are:
* Company A - $4
* Company Z - $5
Shareholders in company Z have been given three alternative offers:
* Cash of $5.50 per share
* Share for share exchange on the basis of 3 for 2
* 10.5% long dated bond for every 20 shares
The bond is has a nominal value of $100 and the expected yield on bonds of similar risk is 10%.
You are advising a Company Z shareholder on the three offers.
She requires a 15% premium if she is to accept the offer.
In providing your advice, which of the following statements is correct?
- A. The bond offer is above the minimum threshold and should be accepted.
- B. The value of the consideration given by the cash and bond offers is certain, unlike the share offer.
- C. The bond offer is only worth $100 which represents a zero premium and should be rejected.
- D. The share for share exchange is the only offer which is above the acceptance threshold.
Answer: D
NEW QUESTION 76
The directors of a multinational group have decided to sell off a loss-making subsidiary and are considering the following methods of divestment:
1. Trade sale to an external buyer
2. A management buyout (MBO)
The MBO team and the external buyer have both offered the same price to the parent company for the subsidiary.
Which of the following is an advantage to the parent company of opting for a MBO compared to a trade sale as the preferred method of divestment?
- A. Avoid a hostile reaction from key management.
- B. Raise the cash more quickly.
- C. Retain the know edge of key management.
- D. Focus on the core competencies of the business
Answer: A
NEW QUESTION 77
Companies A, B, C and D:
* are based in a country that uses the K$ as its currency.
* have an objective to grow operating profit year on year.
* have the same total levels of revenue and cost.
* trade with companies or individuals in the eurozone. All import and export trade with companies or individuals in the eurozone is priced in EUR.
Typical import/export trade for each company in a year are as follows:
Which company's growth objective is most sensitive to a movement in the EUR/K$ exchange rate?
- A. Company C
- B. Company D
- C. Company B
- D. Company A
Answer: C
NEW QUESTION 78
Company A has just announced a takeover bid for Company B.
The two companies are large companies in the same industry_ The bid is considered to be hostile.
Company B's Board of Directors intends to try to prevent the takeover as they do not consider it to be in the best interests of shareholders Which THREE of the following are considered to be legitimate post-offer defences?
- A. Alter the memorandum and articles of association to state that a minimum of 75% of shareholders must agree to the bid before it can proceed
- B. Make a counter bid for Company A provided such an acquisition could enhance Company B's shareholder wealth
- C. Refer the bid to the competition authorities to try to have the bid prohibited on competition grounds
- D. Publish very optimistic financial forecasts for Company B even though the Board of Directors realises that these are highly unlikely to be achievable
- E. Have all the assets independently professionally revalued to demonstrate that the offer undervalues the company
Answer: A,B,C
NEW QUESTION 79
......
Prepare With Top Rated High-quality CIMAPRA19-F03-1 Dumps For Success in Exam: https://www.pass4sures.top/CIMA-Strategic-level/CIMAPRA19-F03-1-testking-braindumps.html
Get Totally Free Updates on CIMAPRA19-F03-1 Dumps PDF Questions: https://drive.google.com/open?id=12vtqs4VXlUoMvaduGfR5S2yvlWnKNdUU