Latest 2020 F3 Exam Questions With Valid F3

1. CIMA F3 Jun iper Financial Strategy Junos, Associate (JNCIA-Junos) JN0-102 https://www.realexamcollection.com/cima/f3-dumps.html

2. CIMA F3 : Practice Exam Question No : 1 A company is concerned about the interest rate that it will be required to pay on a planned bond issue. It is considering issuing bonds with warrants attached. Advise the directors which of the following statements about warrants is NOT correct? A. Warrants are a debt sweetener attached to the bond to drive down the interest rate payable on the bond. B. Warrants give the holder the right to buy ordinary shares in the company at a fixed price at a future date. C. Warrants can be sold back to the issuing company for the nominal value of the share if no longer required by the bond holder. D. Warrants can potentially be very expensive because they can involve the issue of shares at a discount in the future if exercised. Answer: C Question No : 2 The Board of Directors of a listed company is considering the company's dividend/retentions policy. The inflation rate in the economy is currently high and is expected to remain so for the foreseeable future. The board are unsure what impact the high level of inflation might have on the dividend policy. Which THREE of the following statements are true? A. The high inflation rate does not need to be considered when determining the dividend policy. B. Consideration should be given to the fact that shareholders will have a desire for real growth in dividend. C. Retained earnings for reinvestment will have to earn a return in excess of the inflation level. D. The impact of inflation on the cash flows should be considered when formulating the dividend policy.

3. CIMA F3 : Practice Exam E. In periods of high inflation 100% of earnings should always be paid out as dividends so that shareholders can protect their wealth against the impact of inflation. Answer: B,C,D Question No : 3 CORRECT TEXT A company wishes to raise new finance using a rights issue to invest in a new project offering an IRR of 10% The following data applies: • There are currently 1 million shares in issue at a current market value of $4 each. • The terms of the rights issue will be $3.50 for 1 new share for 5 existing shares. • The company's WACC is currently 8%. What is the yield-adjusted theoretical ex-rights price (TERP)? Give your answer to 2 decimal places. $ ? Answer: 4.06, 4.060 Question No : 4 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.

4. CIMA F3 : Practice Exam 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 Question No : 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 No : 6 Under traditional theory, an increase in a company's WACC would cause the value of the company to: A. Increase B. Decrease C. Stay the same D. Either increase or decrease Answer: B

5. CIMA F3 : Practice Exam Question No : 7 CORRECT TEXT A company is wholly equity funded. It has the following relevant data: • Dividend just paid $4 million • Dividend growth rate is constant at 5% • The risk free rate is 4% • The market premium is 7% • The company's equity beta factor is 1.2 Calculate the value of the company using the Dividend Growth Model. Give your answer in $ million to 2 decimal places. $ ? million Answer: 56.76, 56.75 Question No : 8 A national airline has made an offer to acquire a smaller airline in the same country. Which of the following would be of most concern to the competition authorities? A. After the acquisition the board propose to reduce the number of flight destinations from the country. B. The board informed a major institutional shareholder about the proposed acquisition before informing other shareholders. C. After the acquisition the board propose to increase prices significantly on routes where no other airlines operate. D. The acquisition is likely to result in significant redundancies of staff currently working for the smaller airline. Answer: C Question No : 9

6. CIMA F3 : Practice Exam A is a listed company. Its shares trade on a stock market exhibiting semi-strong form efficiency. Which of the following is most likely to increase the wealth of A's shareholders? A. Announcing that a project will be undertaken generating a positive net present value. B. Announcing that the final dividend will remain unchanged from the previous 3 years. C. Announcing that a non-current asset will be revalued in the statement of financial position. D. Announcing that inventory will be impaired. Answer: A Question No : 10 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: A. minimises the environmental impact of its business processes. B. creates value in the short, medium and long term. C. contributes positively to the economic well being of the environment in which it operates. D. ensures that the conflicting needs of different stakeholder groups are met in an optimal manner. Answer: B https://www.realexamcollection.com/cima/f3-dumps.html