CIMAPRA19-F03-1 Actual Questions Answers Pass With Real CIMAPRA19-F03-1 Exam Dumps
CIMAPRA19-F03-1 Dumps Prepare Your Exam With 346 Questions
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.
NEW QUESTION 162
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?
- A. Using cash is theoretically superior to using profits in a valuation calculation.
- B. It give on estimate of the likely shareholder value that will be created.
- C. It avoids the problem of having to forecast a sustainable level of future growth.
- D. It incorporates the time value of money.
- E. The calculations are much simpler.
Answer: A,D,E
NEW QUESTION 163
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 has the same risk as the average market risk.
- C. It is not possible to tell from CAPM.
- D. It has lower risk than the average market risk.
Answer: A
NEW QUESTION 164
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 A
- B. Company D
- C. Company B
- D. Company C
Answer: C
NEW QUESTION 165
Company A needs to raise AS500 mi lion to invest in a new project and is considering using a pub ic issue of bonds to finance the investment.
Which THREE of the following statements-relating to this bond issue are true?
- A. The bond market is unregulated making it easier to raise finance
- B. Purchasing bonds in the capital markets enables entities to borrow large amounts of finance.
- C. A company must be listed before it can issue bones.
- D. Bonds issues in the corporate debt market are underwritten.
- E. The largest issuer of bond i3 the government.
Answer: B,C,E
NEW QUESTION 166
A company is currently all-equity financed.
The directors are planning to raise long term debt to finance a new project.
The debt:equity ratio after the bond issue would be 40:60 based on estimated market values.
According to Modigliani and Miller's Theory of Capital Structure without tax, the company's cost of equity would:
- A. decrease.
- B. increase or decrease depending on the bond's coupon rate.
- C. increase.
- D. stay the same.
Answer: C
NEW QUESTION 167
Which THREE of the following would be of most interest to lenders deciding whether to provide long-term debt to a company?
- A. Current gearing ratio
- B. interest cover on existing debt
- C. Earnings per share
- D. Quality of current management
- E. Dividend cover
Answer: A,B,D
NEW QUESTION 168
A company is considering taking out $10.000,000 of floating rate bank borrowings to finance a new project.
The current rate available to the company on floating rate barrowings is 8%. The borrowings contain a covenant based on an interested cover of 5 times.
The project is expected to generate the following results:
At what interest rate on the floating rate borrowings is the bank covenant first breached?
- A. 9.4%
- B. 11.0%
- C. 10.0%
- D. 8.0%
Answer: B
NEW QUESTION 169
The value of a call option will increase because of:
- A. An increase in the time to expiry.
- B. A decrease in the volatility of the share.
- C. An increase in the strike price.
- D. A decrease in the market value of the share
Answer: D
NEW QUESTION 170
Company U has made a bid for the entire share capital of Company B.
Company U is offering the shareholders in Company B the option of either a share exchange or a cash alternative.
Advise the shareholders in Company B which THREE of the following would be considered disadvantages of accepting the cash consideration?
- A. Cash consideration is certain whereas Company U's future share price performance is uncertain.
- B. Company U is not expected to change its dividend policy post-acquisition.
- C. Taxation is payable on realised capital gains.
- D. Interest rates on deposit accounts are currently at a historic low and are expected to remain low.
- E. There will be no opportunity to participate in the future economic success of Company U.
Answer: C,D,E
NEW QUESTION 171
TTT pic is a listed company. The following information is relevant:
TTT pic's board is considering issuing new 6% irredeemable debt to re-purchase equity. This is expected to change TTT pic's debt to equity mix to 40: 60 by market value. The corporate tax rate is 20%.
What will be TTT pic's WACC following this change in capital structure?
- A. 11.09%
- B. 11.66%
- C. 12.67%
- D. 13.43%
Answer: A
NEW QUESTION 172
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. The capital markets are efficient markets.
- D. Investors act in a rational manner.
- E. Investors do not always have access to perfect information.
Answer: B,C,D
Explanation:
Discursive_F0
NEW QUESTION 173
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 174
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 A
- B. Company D
- C. Company B
- D. Company C
Answer: C
NEW QUESTION 175
A company's Board of Directors is assessing the likely impact of financing future new projects using either equity or debt.
The directors are uncertain of the effects on key variables.
Which THREE of the following statements are true?
- A. Debt finance will increase the cost of equity.
- B. Equity finance will reduce the overall financial risk.
- C. The choice between using either equity or debt will have no impact on the amount of corporate income tax payable.
- D. Equity finance will increase pressure to pay a higher total future dividend.
- E. Debt finance is always preferable to equity finance.
- F. Retained earnings has no cost, and is therefore the cheapest form of equity finance.
Answer: A,B,D
NEW QUESTION 176
A financial services company reported the following results in its most recent accounting period:
The company has an objective to achieve 5% earnings growth each year. The directors are discussing how this objective might be achieved next year.
Revenues have been flat over the last couple of years as the company has faced difficult trading conditions. Revenue is expected to stay constant in the coming year and so the directors are focussing efforts on reducing costs in an attempt to achieve earnings growth next year.
Interest costs will not change because the company's borrowings are subject to a fixed rate of interest.
What operating profit margin will the company have to achieve next year in order to just achieve its 5% earnings growth objective'?
- A. 58.0%
- B. 55.8%
- C. 60.0%
- D. 58.5%
Answer: A
NEW QUESTION 177
A listed company is financed by debt and equity.
If it increases the proportion of debt in its capital structure it would be in danger of breaching a debt covenant imposed by one of its lenders.
The following data is relevant:
The company now requires $800 million additional funding for a major expansion programme.
Which of the following is the most appropriate as a source of finance for this expansion programme?
- A. Retained earnings
- B. Private placement of a bond
- C. Bank overdraft
- D. Rights issue
Answer: D
NEW QUESTION 178
The following information relates to Company A's current capital structure:
Company A is considering a change in the capital structure that will increase gearing to 30:70 (Debt:Equity).
The risk -free rate is 3% and the return on the market portfolio is expected to be 10%.
The rate of corporate tax is 25%
Using the Capital Asset Pricing Model, calculate the cost of equity resulting from the proposed change to the capital structure.
- A. 11.4%
- B. 10.1%
- C. 9.3%
- D. 12.3%
Answer: D
NEW QUESTION 179
Which TWO of the following situations offer arbitrage opportunities?
A)
B)
C)
D)
- A. Option D
- B. Option B
- C. Option C
- D. Option A
Answer: B
NEW QUESTION 180
A manufacturing company based in Country R. where the currency is the R$, has an objective of maintaining an operating profit margin of at least 10% each year
Relevant data:
* The company makes sales to Country S whose currency is the SS It also makes sales to Country T whose currency is the T$ " All purchases are from Country U whose currency is the US.
* The settlement of an transactions is in the currency of the customer or supplier
Which of the following changes would be most likely to help the company achieve its objective?
- A. The R$ strengthens against the S$ over time.
- B. The R$ weakens against the U$ over time
- C. The R$ strengthens against the U$ over time.
- D. The T$ weakens against the R$ over time
Answer: C
NEW QUESTION 181
A company raised fixed rate bank finance together with an interest rate swap for the same term and same principal value to pay floating receive fixed rate interest on an annual basis.
Which THREE of the following statements are correct?
- A. LIBID (London Interbank Bid Rate) is normally used as the reference rate for determining interest due under the swap.
- B. On the first day of this arrangement, the company receives the principal borrowed from the bank and pays this across to the swap counterparty.
- C. The company has effectively obtained floating rate debt.
- D. The swap contract is normally a contract between a company and a bank.
- E. Under the swap, interest is exchanged every year.
Answer: C,D,E
NEW QUESTION 182
Company WWW is considering making a takeover bid for Company KKA Company KKA's current share price is $5.00
Company WWW is considering either
" A cash payment of $5.75 for each share in Company KKA
" A 5 year corporate bond with a market value of $90 in exchange for 15 shares in Company KKA
Calculate the highest percentage premium which Company KKA shareholders will receive.
- A. Cash premium = 15%
- B. Corporate bond premium = 80%
- C. Corporate bond premium = 20%
- D. Cash premium = 10%
Answer: C
NEW QUESTION 183
Company X is an established, unquoted company which provides IT advisory services.
The company's results and cashflows are growing steadily and it has few direct competitors due to the very specialised nature of it's business. Dividends are predictable and paid annually.
Company P is looking to buy 30% of company X's equity shares.
Which TWO of the following methods are likely to be considered most suitable valuation methods for valuing company P's investment in Company X?
- A. Dividend based using DVM
- B. Earnings yield method using a listed IT company as proxy
- C. P/E ratio method using IT industry average
- D. Cash based using free cash flow before interest
- E. Asset based using replacement cost
Answer: A,D
NEW QUESTION 184
A company is considering either directly exporting its product to customers in a foreign country or setting up a subsidiary in the foreign country to manufacture and supply customers in that country.
Details of each alternative method of supplying the foreign market are as follows:
There is an import tax on product entering the foreign country of 10% of sales value.
This import duty is a tax-allowable deduction in the company's domestic country.
The exchange rate is A$1.00 = B$1.10
Which alternative yields the highest total profit after taxation?
- A. Domestic: A$41,250
- B. Foreign subsidiary: A$35,000
- C. Domestic: A$33,750
- D. Foreign subsidiary: A$38,500
Answer: B
NEW QUESTION 185
......
New CIMAPRA19-F03-1 Dumps - Real CIMA Exam Questions: https://www.verifieddumps.com/CIMAPRA19-F03-1-valid-exam-braindumps.html
Dependable CIMAPRA19-F03-1 Exam Dumps to Become CIMA Certified: https://drive.google.com/open?id=1kmdktPEXON819X_zaFOZrLvbb388gkHd
