CIMAPRA19-F03-1 Actual Questions Answers Pass With Real CIMAPRA19-F03-1 Exam Dumps
CIMAPRA19-F03-1 Dumps Prepare Your Exam With 435 Questions
To take the CIMA CIMAPRA19-F03-1 (F3 Financial Strategy) Certification Exam, candidates must have a strong understanding of financial concepts and practices. They must also have completed the CIMA Certificate in Business Accounting or have an equivalent accounting qualification. CIMAPRA19-F03-1 exam consists of 90 multiple-choice questions and lasts for three hours. To pass the exam, candidates must score at least 50%. Successful completion of the exam leads to the award of the CIMA Advanced Diploma in Management Accounting, which is highly respected in the financial industry.
CIMA F3 Exam is a computer-based exam and has a duration of three hours. CIMAPRA19-F03-1 exam consists of 60 objective test questions that are divided into two sections. The first section assesses candidates' understanding of financial management principles and techniques, while the second section evaluates their ability to apply these principles and techniques to real-world scenarios. To pass the exam, candidates need to score at least 70% in each section. CIMAPRA19-F03-1 exam is designed to challenge candidates' critical thinking and problem-solving skills, and passing it is an important step towards becoming a chartered management accountant.
NEW QUESTION # 161
The ex div share price of Company A's shares is $.3.50
An investor in Company A currently holds 2,000 shares.
Company A plans to issue a script divided of 1 new shares for every 10 shares currently held.
After the scrip divided, what will be the total wealth of the shareholder?
Give your answer to the nearest whole $.
- A. 0
- B. 1
Answer: A
Explanation:
NEW QUESTION # 162
A company aims to increase profit before interest and tax (PBIT) each year.
The company reports in A$ but has significant export sales priced in B$.
All other transactions are priced in A$.
In 20X1, the company reported:
In 20X2, the only changes expected are:
* An increase in export prices of 10%, but no change to units sold.
* A rise in the value of the B$ to A$/B$ 2.500 (that is, A$ 1 = B$ 2.5) Is it likely that the company would still meet its objective to grow PBIT between 20X1 and 20X2?
- A. Yes, PBIT would increase by A$ 48 million.
- B. No, PBIT would fall by A$ 150 million.
- C. Yes, PBIT would increase by A$ 150 million.
- D. No, PBIT would fall by A$ 48 million.
Answer: D
NEW QUESTION # 163
A company's directors plan to increase gearing to come in line with the industry average of 40%. They need to know what the effect will be on the company's WACC.
According to traditional theory of gearing the WACC is most likely to:
Answer:
Explanation:
NEW QUESTION # 164
Which of the following statements about IFRS 7 Financial Instruments: Disclosures is true?
- A. IFRS 7 only applies to entities that are designated as financial institutions by a regulatory authority.
- B. IFRS 7 requires disclosures to be given for each separate class of financial instruments.
- C. The main requirement of IFRS 7 is for qualitative disclosures relating to financial instruments and market risks.
- D. IFRS 7 requires sensitivity analysis in relation to credit risk.
Answer: B
NEW QUESTION # 165
Company ABD and Company BCD operate in the same industry and each has a significant market share.
The directors of Company ABD have heard rumours in the market that Company BCD is planning to bid to takeover Company ABD. They do not believe the takeover would be in the best interests of the shareholders and are therefore keen to prevent the bid from going ahead.
Which THREE of the following defense strategies could be used by the directors of Company ABD at this point in time?
- A. Communicate effectively with their shareholders
- B. Poison Pill
- C. Refer the bid to the competition authorities
- D. White Knight
- E. Revalue the non-current assets
Answer: A,B,E
NEW QUESTION # 166
A company generates and distributes electricity and gas to households and businesses.
Forecast results for the next financial year are as follows:
The Industry Regulator has announced a new price cap of $2.00 per Kilowatt.
The company expects this to cause consumption to rise by 15% but costs would remained unaltered.
The price cap is expected to cause the company's net profit to fall to:
- A. $164.00 million profit
- B. $8.75 million profit
- C. $43.00 million profit
- D. $126.50 million loss
Answer: A
NEW QUESTION # 167
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.
$ ? million
- A. 100, 300000000
- B. 300, 300000000
Answer: B
NEW QUESTION # 168
Extracts from a company's profit forecast for the next financial year as follows:
Since preparing the forecast, the company has decided to return surplus cash to shareholders by a share repurchase arrangement.
The share repurchase would result in the company purchasing 20% of the 1,250 million ordinary shares currently in issue and canceling them.
Assuming the share repurchase went ahead, the impact on the company's forecast earnings per share will be an increase of:
- A. $0.100
- B. $0.175
- C. $0.200
- D. $0.125
Answer: A
NEW QUESTION # 169
Listed company R is in the process of making a cash offer for the equity of unlisted company S.
Company R has a market capitalisation of $200 million and a price/earnings ratio of 10.
Company S has a market capitalisation of $50 million and earnings of $7 million.
Company R intends to offer $60 million and expects to be able to realise synergistic benefits of $20 million by combining the two businesses. This estimate excludes the estimated $8 million cost of integrating the two businesses.
Which of the following figures need to be used when calculating the value of the combined entity in $ millions?
- A. 7, 10, 20, 50, 200
- B. 8, 20, 50, 60, 200
- C. 20, 50, 60, 200
- D. 8, 20, 50, 200
Answer: B
Explanation:
Explanation
Calculation_F0
Calc_Set1
NEW QUESTION # 170
Modigliani and Miller are the main proponents of the view that the dividend policy is irrelevant to the value of a company's shares.
They argue that a company that continually reinvests its entire earnings would generate the same shareholder wealth if it engaged in a policy of high dividends and financed its expansion with funds obtained from rights issues.
Which THREE of the following statements are assumptions that are required in order to support this proposition?
- A. There is a multiplicity of corporate and personal income tax rates.
- B. There are no transaction costs involved in the issue of new shares (including rights issues).
- C. Investors do not always have access to perfect information.
- D. The capital markets are efficient markets.
- E. Investors act in a rational manner.
Answer: B,D,E
Explanation:
Discursive_F0
NEW QUESTION # 171
Under traditional theory, an increase in a company's WACC would cause the value of the company to:
- A. Increase
- B. Either increase or decrease
- C. Decrease
- D. Stay the same
Answer: C
NEW QUESTION # 172
Company GDD plans to acquire Company HGG, an unlisted company which has been in business for 3 years.
Company HGG has incurred losses in its first 3 years but is expected to become highly profitable in the near future There are no listed companies in the country operating in the same business field as Company HGG The future success of Company HGG's business and hence the future growth rate in earnings and dividends is difficult to determine Company GDD is assessing the validity of using the dividend growth method to value Company HGG Which THREE of the following are weaknesses of using the dividend growth model to value an unlisted company such as Company HGG?
- A. The dividend growth model does not take the time value of money into consideration
- B. The future growth rate in earnings and dividends will be difficult to accurately determine
- C. The cost of capital will be difficult to estimate
- D. The company has been unprofitable to date and hence, there is no established dividend payment pattern
- E. The future projected dividend stream is used as the basis for the valuation
Answer: C,D,E
NEW QUESTION # 173
The long-term prospects for inflation in the UK and the USA are 1% and 4% per annum respectively.
The GBP/USD spot rate is currently GBP/USD1.40
Using purchasing power parity theory, what GBP/USD spot rate would you expect to see in six months' time?
- A. GBP/USD1.42
- B. GBP/USD1.36
- C. GBP/USD1.44
- D. GBP/USD1.38
Answer: A
NEW QUESTION # 174
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 # 175
The financial assistant of a geared company has prepared the following calculation of the company's equity value:
Useful information;
* Tax rate - 20%
* Cost of equity = 12%
* Weighted average cost of capital (WACC)= 10%
" Debt finance of the company comprises a $6 million 7% undated bond trading at par Valuation workings.
Which of the following errors has been made by the financial assistant?
- A. Discounting at WACC is incorrect.
- B. A two year discount factor is incorrect in the perpetuity calculation.
- C. The 20% tax charge is missing.
- D. A deduction for debt value is missing.
Answer: D
NEW QUESTION # 176
Company AEE has a 10 year 6% corporate bond in issue which has a nominal value of $400 million, which is currently trading at 95%. The bond is secured on the company's property
The Board of Directors has calculated the equity value of Company AEE as follows;
Which THREE of the following are errors in the valuation?
- A. Deducting $400 million for the value of the company's corporate bond.
- B. Deducting replacement capital expenditure
- C. Using the company's weighted average cost of capital to discount cash flows attributable to shareholders.
- D. Using cash flows to equity rather than expected dividends as the initial cash flows.
- E. Including retained earnings from the Statement of Financial Position.
Answer: B,C,E
NEW QUESTION # 177
Company A has a cash surplus.
The discount rate used for a typical project is the company's weighted average cost of capital of 10%.
No investment projects will be available for at least 2 years.
Which of the following is currently most likely to increase shareholder wealth in respect of the surplus cash?
- A. Investing in a 2 year bond returning 5% each year.
- B. Paying the surplus cash as a dividend at the earliest opportunity.
- C. Maintaining the cash in a current account.
- D. Investing in the local money market at 4% each year.
Answer: B
Explanation:
Calc_Set4
NEW QUESTION # 178
A venture capitalist invests in a company by means of buying:
* 9 million shares for $2 a share and
* 8% bonds with a nominal value of $2 million, repayable at par in 3 years' time.
The venture capitalist expects a return on the equity portion of the investment of at least 20% a year on a compound basis over the first 3 years of the investment.
The company has 10 million shares in issue.
What is the minimum total equity value for the company in 3 years' time required to satisify the venture capitalist's expected return?
Give your answer to the nearest $ million.
$ million.
Answer:
Explanation:
34, 35, 34000000, 35000000
NEW QUESTION # 179
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CIMA CIMAPRA19-F03-1 exam is a comprehensive test that assesses the candidate's understanding of financial strategy. CIMAPRA19-F03-1 exam is divided into three sections, each of which has a specific focus. The first section covers financial analysis and planning, which involves analyzing financial data to make informed decisions. The second section focuses on investment appraisal, which involves evaluating potential investment opportunities. The final section covers risk management, which involves identifying and managing potential risks to the business. Overall, the CIMA CIMAPRA19-F03-1 exam is a valuable certification for individuals who want to advance their career in finance and accounting.
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