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CIMA F3 Exam With Confidence Using Practice Dumps

Exam Code:
F3
Exam Name:
Financial Strategy
Certification:
Vendor:
Questions:
435
Last Updated:
Jan 24, 2025
Exam Status:
Stable
CIMA F3

F3: CIMA Strategic level Exam 2024 Study Guide Pdf and Test Engine

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Financial Strategy Questions and Answers

Question 1

Company X plans to acquire Company Y.

 

Pre-acquisition information:

 

 

Post-acquisition information:

Total combined earnings are expected to increase by 10%

Total combined P/E multiple will remain at 10 times

 

Which of the following share-for-share exchanges will result in an increase of 10% in Company X's share price post-acquisition?

Options:

A.

1 share in Company X for 2.75 shares in Company Y

B.

3 shares in Company X for 5 shares in Company Y

C.

2 shares in Company X for 1 shares in Company Y

D.

1 share in Company X for 2 shares in Company Y

Buy Now
Question 2

A company has a covenant on its 5% long term corporate bond.

   • Covenant - The earnings must not fall below $7 million

The bond has a nominal value of $60 million.

It is currently trading at 80% of its nominal value.

The projected earnings before interest and taxation for next year are $11.5 million.

The company retains 80% of its earnings. It pays tax at 20%.

 

Advise the Board of Directors which of the following covenant conditions will apply next year?

Options:

A.

The earnings will be = $7.28 million (The covenant will not be breached).

B.

The earnings will be = $11.50 million (The covenant will not be breached).

C.

The earnings will be = $6.80 million (The covenant will be breached).

D.

The earnings will be = $5.44 million (The covenant will be breached).

Question 3

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?

Options:

A.

Communicate effectively with their shareholders

B.

Revalue the non-current assets

C.

Refer the bid to the competition authorities

D.

Poison Pill

E.

White Knight