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CIMA F3 - Financial Strategy exam in just 24 HOURS! Cima F3 Financial strategy DUMPS PDF Buy Complete Questions Answers File from 100% REAL EXAM QUESTIONS ANSWERS http://www.cimadumps.us/f3-financial-strategy 100% Exam Passing Guarantee & Money Back Assurance
Sample Questions - CimaDumps.us • Question # 1: Which THREE of the following remain unchanged over the life of a 10 year fixed rate bond? A. The coupon rate B. The yield C. The market value D. The nominal value E. The amount payable on maturity Answer: A, D, E
Question # 2: Companies A, B, C and D: • Are based in a country that uses the K$ as its currency. • Have an objective to grow operating profit year on year. • Have the same total levels of revenue and cost. • Trade with companies or individuals in the euro zone. All import and export trade with companies or individuals in the euro zone is priced in EUR. Typical import/export trade for each company in a year are as follows: Which company's growth objective is most sensitive to a movement in the EUR/K$ exchange rate? • A.Company A • B.Company B • C.Company C • D.Company D • Answer: B
Question # 3: A company currently has a 6.25% fixed rate loan but it wishes to change the interest style of the loan to variable by using an interest rate swap directly with the bank. The bank has quoted the following swap rate: • 5.50 % - 5.55% in exchange for LIBOR LIBOR is currently 5%. If the company enters into the swap and LIBOR remains at 5%, what will the company's interest cost be? • A. 5.00% • B. 5.75% • C.5.70% • D. 6.25% • Answer: B
Question # 4: A private company manufactures goods for export, the goods are priced in foreign currencyB$. The company is partly owned by members of the founding family and partly by a venture capitalist who is helping to grow the business rapidly in preparation for a planned listing in three years' time. The company therefore has significant long term exposure to the B$. This exposure is hedged up to 24 months into the future based on highly probable forecast future revenue streams. The company does not apply hedge accounting and this has led to high volatility in reported earnings. Which of the following best explains why external consultant shave recently advised the company to apply hedge accounting? • A. To provide a more appropriate earnings figure for use in calculating the annual dividend. • B. To make it easier for the market to value the business when it is listed on the Stock Exchange. • C. To ensure that the venture capitalist receives regular annual returns on its investment. • D. To fully adopt IFRS in preparation for listing the company. Answer: B
Question # 5: • A company is currently all-equity financed. The directors are planning to raise long term debt to finance a new project. The debt: equity ratio after the bond issue would be 30:60 based on estimated market values. According to Modigliani and Miller's Theory of Capital Structure without tax, the company's cost of equity would: • A. Stay the same. • B. Decrease. • C. Increase. • D. Increase or decrease depending on the bond's coupon rate. • Answer: C
Question # 6: When valuing an unlisted company, a P/E ratio for a similar listed company may be used but adjustments to the P/E ratio may be necessary. Which THREE of the following factors would justify a reduction in the proxy p/e ratio before use? • A. The relative lack of marketability of unlisted company shares. • B. A lower level of scrutiny and regulation for unlisted companies. • C. Unlisted companies being generally smaller and less established. • D. Control premium not being included within the proxy p/e ratio used. • E. The forecast earnings growth being relatively higher in the unlisted company. • F. A profit item within the unlisted company's latest earnings which will not reoccur. • Answer: A, B, C
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