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CIMA F3 Exam With Confidence Using Practice Dumps

Exam Code:
F3
Exam Name:
Financial Strategy
Certification:
Vendor:
Questions:
393
Last Updated:
Feb 28, 2026
Exam Status:
Stable
CIMA F3

F3: CIMA Strategic Exam 2025 Study Guide Pdf and Test Engine

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Financial Strategy Questions and Answers

Question 1

A company has stable earnings of S2 million and its shares are currently trading on a price earnings multiple {PIE) of 10 times. It has10 million shares in issue.

The company is raising S4 million debt finance to fund an expansion of its existing business which is forecast to increase annual earnings straight away by 25% and then remain at that level for the foreseeable future. The corporation tax rate is 20%. It is expected that the P/E will reduce to 8 times over the next year.

What is the most likely change in shareholder wealth resulting from this plan?

Options:

A.

Shareholder wealth will increase by $4 million.

B.

Shareholder wealth will increase by $3.2 million.

C.

Shareholder wealth will increase by $5 million

D.

No change in shareholder wealth.

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Question 2

The competition authorities are investigating the takeover of Company Z by a larger company, Company Y.

Both companies are food retailers. 

The takeover terms involve using a part cash, part share exchange means of payment.

Company Z is resisting the bid, arguing that it undervalues its business, while lobbying extensively among politicians to sway public opinion against the bidder.

 

Which of the following actions by Company Y is most likely to persuade the competition authorities to approve the acquisition?

Options:

A.

Company Y increases the cash element of its bid offer.

B.

Company Y agrees to dispose of specified outlets which geographically overlap those of Company Z.

C.

Company Y guarantees to preserve employment at its cental distribution depot.

D.

Company Y undertakes to pass on any cost savings to customers.

Question 3

The Board of Directors of a listed company wish to estimate a reasonable valuation of the entire share capital of the company in the event of a takeover bid.

The company's current profit before taxation is $4.0 million.

The rate of corporate tax is 25%.

The average P/E multiple of listed companies in the same industry is 8 times current earnings.

The P/E multiple of recent takeovers in the same industry have ranged from 9 times to 10 times current earnings.

The average P/E multiple of the top 100 companies on the stock market is 15 times current earnings. 

 

Advise the Board of Directors which of the following is a reasonable estimate of a range of values of the entire share capital in the event of a bid being made for the whole company?

Options:

A.

Minimum = $36 million, and maximum = $40 million.

B.

Minimum = $27 million, and maximum = $30 million.

C.

Minimum = $32 million, and maximum = $60 million.

D.

Minimum = $24 million, and maximum = $45 million.