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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:
Nov 6, 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

The ex div share price of a company's shares is $2.20.

 

An investor in the company currently holds 1,000 shares.

 

The company plans to issue a scrip dividend of 1 new share for every 10 shares currently held.

 

After the scrip dividend, what will be the total wealth of the shareholder?

 

Give your answer to the nearest whole $.

 

 $ ?  .

Options:

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Question 2

A company has a financial objective of maintaining a gearing ratio of between 30% and 40%, where gearing is defined as debt/equity at market values. 

The company has been affected by a recent economic downturn leading to a shortage of liquidity and a fall in the share price during 20X1.

 

On 31 December 20X1 the company was funded by:

•    Share capital of 4 million $1 shares trading at $4.0 per share.

•    Debt of $7 million floating rate borrowings.

 

The directors plan to raise $2 million additional borrowings in order to improve liquidity.  

They expect this to reassure investors about the company's liquidity position and result in a rise in the share price to $4.2 per share.

 

Is the planned increase in borrowings expected to help the company meet its gearing objective?

Options:

A.

No, gearing would increase but the gearing objective would be met both before and after the announcement.

B.

No, gearing would increase and the gearing objective would be exceeded both before and after the announcement.

C.

No, gearing would increase and the gearing objective would be met before the announcement but exceeded after the announcement.

D.

Yes, gearing would fall and the gearing objective would be exceeded before the announcement but met after the announcement.

Question 3

A company's Board of Directors is assessing the likely impact of financing new projects by using either debt or equity finance.

The impact of using debt or equity finance on some key variables is uncertain.

 

Which THREE of the following statements are true?

Options:

A.

The use of equity finance reduces the company's overall financial risk.

B.

The use of equity finance will create pressure for increases in dividend per share in the future.

C.

The use of debt finance will always result in an increase in earnings per share.

D.

Retained earnings is the cheapest form of equity finance.

E.

The use of debt finance increases the cost of equity.

F.

The use of debt finance is always preferable to equity finance.