Study CIMA CIMAPRA19-F03-1 Dumps & CIMAPRA19-F03-1 Valid Test Papers

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Format of the CIMA F3: Financial Strategy Exam

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CIMA F3 (Financial Strategy) exam is a critical component of the Chartered Institute of Management Accountants (CIMA) certification. CIMAPRA19-F03-1 exam is designed to assess the competencies of candidates in creating and implementing financial strategies for organizations. The F3 exam is considered to be one of the most challenging exams in the CIMA certification process, and it covers a diverse range of topics, including financial risk management, investment appraisal, and valuation techniques.

CIMA CIMAPRA19-F03-1 Exam is open to individuals who have completed the CIMA Professional Qualification or have an equivalent qualification. CIMAPRA19-F03-1 exam is designed to test the candidate's ability to apply financial theories and principles in a practical business setting. CIMAPRA19-F03-1 exam tests the candidate's ability to analyze and interpret financial data, evaluate financial risks, and develop effective financial strategies.

CIMA F3 Financial Strategy Sample Questions (Q279-Q284):

NEW QUESTION # 279
Z wishes to borrow at a floating rate and has been told that it can use swaps to reduce the effective interest rate it pays. Z can borrow floating at Libor ' 1, and fixed at 10%.
Which of the following companies would be the most appropriate for Z to enter into a swap with?

Answer: B


NEW QUESTION # 280
Company C is a listed company. It is currently considering the acquisition of Company D. The original founder of Company C currently owns 52% of the shares.
Alternative forms of consideration for Company D being considered are as follows:
* Cash payment, financed by new borrowing
* issue of new shares in Company C
Which of the following is an advantage of a cash offer over a share-for exchange from the viewpoint of the original founder of Company C?

Answer: A

Explanation:
Founder of Company C owns 52% and wants to keep control.
A share-for-share exchange means issuing new shares # dilutes the founder's holding and may reduce control.
A cash offer financed by borrowing does not issue new shares # founder's percentage holding (and control) is preserved.
That is exactly what option A states.


NEW QUESTION # 281
A company's gearing (measured as debt/(debt + equity)) is currently 60% and it is investigating whether an optimal gearing structure exists within the industry.
It has analysed the capital structure of similar companies in the industry and it would appear that there is evidence supporting the traditional theory of capital structure.
Companies with the lowest WACC in the industry have gearing of around 45% to 50%.
Which of the following actions would result in the company achieving a more optimal capital structure?

Answer: C


NEW QUESTION # 282
The directors of a financial services company need to calculate a valuation of their company's equity in preparation for an upcoming initial Public Offering (IPO) of shares. At a recent board meeting they discussed the various methods of business valuation.
The Chief Executive suggested using a Price-earing (P./E) method of valuation, but the finance Director argued that a valuation based on forecast cash flows to equity would be more appropriate.
Which THREE of the following are advantages of valuation based on forecast cash flows to equity, compared to a valuating using a price earnings methods?

Answer: A,C,D

Explanation:
We're comparing valuation using forecast cash flows to equity (DCF / FCFE) vs P/E multiple:
A). Using cash is theoretically superior to using profits - True. Valuation theory (and CIMA F3) say value is based on cash flows, not accounting profits. Cash flow-based valuation is more theoretically robust than P/E- based (profit-based) methods.
B). It gives an estimate of the likely shareholder value that will be created - True. Discounting forecast cash flows to equity gives a direct estimate of the present value of future benefits to shareholders, i.e. shareholder value. A P/E multiple is more of a relative/comparative shortcut.
D). It incorporates the time value of money - True. DCF explicitly discounts future cash flows back to present value at the cost of equity. A simple P/E multiple does not explicitly model timing.
Not correct:
C - DCF is more complex, not simpler.
E - You still need long-term growth assumptions (terminal value), so it does not avoid growth forecasting problems.


NEW QUESTION # 283
A company wishes to raise new finance using a rights issue to invest in a new project offering an IRR of 10% The following data applies:
* There are currently 1 million shares in issue at a current market value of $4 each.
* The terms of the rights issue will be $3.50 for 1 new share for 5 existing shares.
* The company's WACC is currently 8%.
What is the yield-adjusted theoretical ex-rights price (TERP)?
Give your answer to 2 decimal places.

Answer:

Explanation:
$ ?
4.06, 4.060


NEW QUESTION # 284
......

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