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Free CIMA CIMAPRA19-F03-1-ENG Exam Questions

Try our Free Demo Practice Tests for Comprehensive CIMAPRA19-F03-1-ENG Exam Preparation

  • CIMA CIMAPRA19-F03-1-ENG Exam Questions
  • Provided By: CIMA
  • Exam: F3 Financial Strategy (Online)
  • Certification: CIMA Professional Qualification
  • Total Questions: 305
  • Updated On: Apr 08, 2025
  • Rated: 4.9 |
  • Online Users: 610
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  • Question 1
    • Company P is a large unlisted food-processing company.
      Its current profit before interest and taxation is $4 million, which it expects to be maintainable in the future.
      It has a $10 million long-term loan on which it pays interest of 10%.
      Corporate tax is paid at the rate of 20%.
      The following information on P/E multiples is available:

      32


      Which of the following is the best indication of the equity value of Company P? 

      Answer: D
  • Question 2
    • The International Integrated Reporting Council (IIRC) was formed in August 2010 and brings together a
      cross-section of representatives from a wide variety of business sectors.
      The primary purpose of the IIRC's framework is to help enable an organsation to communicate how it:

      Answer: B
  • Question 3
    • An analyst has valued a company using the free cash flow valuation model.
      The analyst used the following data in determining the value:
       • Estimated free cashflow in 1 year's time = $100,000
       • Estimated growth in free cashflow after the first year = 5?ch year indefinitely
       • Appropriate cost of equity = 10%
      The result produced by the analyst was as follows:
      Value of equity = $100,000 (1+0.05)/0.10 = $1,050,000
      The analyst made a number of errors in determining the value. 
      By how much has the analyst undervalued the company? 

      Answer: A
  • Question 4
    • Extracts from a company's profit forecast for the next financial year as follows:

      11
      Since preparing the forecast, the company has decided to return surplus cash to shareholders by a share
      repurchase arrangement.
      The share repurchase would result in the company purchasing 20% of the 1,250 million ordinary shares
      currently in issue and canceling them.
      Assuming the share repurchase went ahead, the impact on the company's forecast earnings per share will be an
      increase of: 

      Answer: A
  • Question 5
    • A company's current profit before interest and taxation is $1.1 million and it is expected to remain constant for
      the foreseeable future.
      The company has 4 million shares in issue on which the earnings yield is currently 10%. It also has a $2
      million bond in issue with a fixed interest rate of 5%.
      The corporate income tax rate is 20% and is expected to remain unchanged.
      Which of the following is the best estimate of the current share price?

      Answer: C
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