CIMA F3 Exam With Confidence Using Practice Dumps

Company AAB is located in country A whose currency is the AS It has a subsidiary, BBA, located m country B that has the BS as its currency AAB has asked BBA to pay BS40 million surplus funds to AAB to assist with a planned new capital investment in country A The exchange rate today is AS1 = BS3

Tax regimes

• Company BBA pays withholding tax of 25% on all cash remitted to the parent company

• Company AAB pays tax of 10% on at cash received from its subsidiary

How much will company AAB have available for investment after receiving the surplus funds from BBA?

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?

B has a S3 million loan outstanding on which the interested rate is reset every 6 months for the following 6 month and the interested is payable at the end of that 6 month period. The next 6 monthly reset period starts in 3 months and the treasurer of B thinks interested rates are likely to raise between and then.

Current 6-month rates are 6.4% and the treasurer can get a rate of 6.9% for a 6-month forward rate agreement (FRA) starting in 3 months time. By transacting an TRA the treasurer can lock in a rate today of 6.9%.

If interested rates are 7.5% in 3 months’ time, what will the net amount payable be?

Give your answer to the nearest thousand dollars.