Reliable CIMA Strategic level CIMAPRA19-F03-1 Dumps PDF Jan 05, 2024 Recently Updated Questions
Pass Your CIMA CIMAPRA19-F03-1 Exam with Correct 435 Questions and Answers
CIMAPRA19-F03-1 exam focuses on the application of advanced financial management techniques to a range of organizational contexts. CIMAPRA19-F03-1 exam covers topics such as risk management, investment appraisal, and financial instruments, among others. Candidates are expected to demonstrate their ability to analyze financial data, develop financial strategies, and evaluate the impact of financial decisions on an organization's performance.
CIMA F3 certification exam is targeted at finance professionals who are looking to advance their careers in the field of financial management. This includes finance managers, financial analysts, investment managers, and other finance professionals who are responsible for making strategic financial decisions. CIMAPRA19-F03-1 exam is designed to test the candidate's ability to apply financial management theories and concepts to real-world scenarios.
NEW QUESTION # 86
An unlisted company which is owned and managed by its original founders has accumulated excess cash following many years of profitable trading.
The Board of Directors is comprised of the four original founders who each hold 25% of the equity share capital.
Which THREE of the following will be significant considerations when deciding on the company's dividend policy?
- A. Income tax rates and the personal tax liabilities of the shareholders.
- B. The impact of the dividend policy on the company's share price.
- C. The dividend policy of listed companies in the same industry.
- D. The adequacy of the pension funds of the original founders.
- E. The cash requirements of the shareholders in the foreseeable future.
Answer: A,D,E
NEW QUESTION # 87
Company W is a manufacturing company with three divisions, all of which are making profits:
* Division A which manufactures cars
* Division B which manufactures trucks
* Division C which manufactures agricultural machinery
Company W is facing severe competitive pressure in all of its markets, and is currently operating with a high level of gearing Company W's latest forecasts suggest that it needs to raise cash to avoid breaching loan covenants on its existing debt finance in 6 months' time
In a recent strategy review. Divisions A and B were identified as being the core divisions of Company W
The management of Division C is known to be interested in the possibility of a management buy-out. Company Z is known to be interested in making a takeover bid for Company W's truck manufacturing division
A rival to Company W has recently successfully demerged its business, this was well received by the Financial markets
Which of the following exit strategies will be most suitable for company W?
- A. Sale of Division B to Company Z
- B. Closure of Division
- C. Demerger of Division C
- D. Management buy-out of Division C
Answer: D
NEW QUESTION # 88
RR has agreed to sell goods to XX for S20.000 XX will pay when the goods are delivered in 6 months time. RR's home currency is the £- The current exchange rate is 4.3 £/S. The projected inflation rate for the S is 2.8%, and for the E 4 6%.
When RR receives payment for its goods, what will the value be to the nearest pound?
- A. £84.520
- B. £86 760
- C. £87.506
- D. £85,243
Answer: C
NEW QUESTION # 89
A company has some 7% coupon bonds in issue and wishes to change its interest rate profile.
It has decided to do this by entering into a plain coupon interest rate swap with it's bank.
The bank has quoted a swap rate of: 6.0% - 6.5% fixed against LIBOR.
What will the company's new interest rate profile be?
- A. VARIABLE at LIBOR
- B. FIXED at 6.5%
- C. VARIABLE at LIBOR + 1.0%
- D. VARIABLE at LIBOR + 0.5%
Answer: C
NEW QUESTION # 90
D has US$10 million to invest over 12 months in either USS or GBP Its options are to invest in USS at the present USS interest rate of 10 18%. or to convert the USS to GBP at the spot rate GBP1 =US$1 61 and invest in GBP at an interest rate of 6.4%.
According to the interest rate parity theory, what will the one year forward rate be?
Give your answer to three decimal places.
Answer:
Explanation:
1.667
NEW QUESTION # 91
A company has in a 5% corporate bond in issue on which there are two loan covenants.
* Interest cover must not fall below 3 times
* Retained earnings for the year must not fall below $3.5 million
The Company has 200 million shares in issue.
The most recent dividend per share was $0.04.
The Company intends increasing dividends by 10% next year.
Financial projections for next year are as follows:
Advise the Board of Directors which of the following will be the status of compliance with the loan covenants next year?
- A. The company will be in compliance with both covenants.
- B. The company will be in breach of the covenant in respect of interest cover only.
- C. The company will breach the covenant in respect of retained earnings only.
- D. The company will be in breach of both covenants.
Answer: C
NEW QUESTION # 92
Company A operates in country A with the AS as its functional currency. Company A expects to receive BS500.000 in 6 months' time from a customer in Country B which uses the B$.
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, 482
- B. AS32, 532
- C. AS31, 790
- D. AS32, 051
Answer: D
NEW QUESTION # 93
A company is reporting under IFRS 7 Financial Instruments: Disclosures for the first time and the directors are concerned about whether this will lead to the disclosure of information that could affect the company's share price.
The company is based in a country that uses the A$ but 40% of revenue relates to export sales to the USA and priced in US$.
When the company reports under IFRS 7 for the first time, the share price is most likely to:
- A. Either increase or decrease depending on market reaction to new information on how financial risk is managed.
- B. Increase due to greater clarity of information available on the extent of US$ risks and how they are managed.
- C. Decrease since investors place a lower value on higher risk businesses.
- D. Stay the same since US$ risk can already be quantified from segmental analysis disclosures included elsewhere in the annual report.
Answer: A
NEW QUESTION # 94
A company has 8% convertible bonds in issue. The bonds are convertible in 3 years time at a ratio of 20 ordinary shares per $100 nominal value bond.
Each share:
* has a current market value of $5.60
* is expected to grow at 5% each year
What is the expected conversion value of each $100 nominal value bond in 3 years' time?
- A. $129.6
- B. $112.0
- C. $100.0
- D. $117.6
Answer: A
NEW QUESTION # 95
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. 0%
- B. 6%
- C. 50%
- D. 8%
Answer: A
NEW QUESTION # 96
A company needs to raise $20 million to finance a project.
It has decided on a rights issue at a discount of 20% to its current market share price.
There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per share.
Calculate the terms of the rights issue.
- A. 1 new share for every 4 existing shares
- B. 1 new share for every 25 existing shares
- C. 1 new share for every 20 existing shares
- D. 1 new share for every 5 existing shares
Answer: A
Explanation:
Explanation
Calc_Set2
NEW QUESTION # 97
The directors of the following four entities have been discussing dividend policy:
Which of these four entities is most likely to have a residual dividend policy?
- A. B
- B. D
- C. A
- D. C
Answer: A
NEW QUESTION # 98
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 # 99
A profitable company wishes to dispose of a loss-making division that generated negative free cashflow in the last financial year.
The division requires significant new investment to return it to profitability.
Which of the following valuation approaches is likely to be the most useful to the company when negotiating the sales price?
- A. P/E ratio applied to forecast earnings next year
- B. Dividend growth model
- C. Asset basis
- D. Discounted forecast free cashflow
Answer: D
NEW QUESTION # 100
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. $8.75 million profit
- B. $126.50 million loss
- C. $43.00 million profit
- D. $164.00 million profit
Answer: D
NEW QUESTION # 101
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CIMA CIMAPRA19-F03-1 (F3 Financial Strategy) Certification Exam is an important certification for individuals who want to pursue a career in finance and accounting. It covers a wide range of topics related to financial strategy and is designed to test the candidate's knowledge and skills in a real-world setting. Candidates who pass the exam will be able to demonstrate their expertise in financial strategy and will be well-prepared to take on new challenges in their careers.
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