Free CIMA CIMAPRO19-F03-1-ENG Exam Questions
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CIMA CIMAPRO19-F03-1-ENG Exam Questions
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Provided By: CIMA
- Exam: F3 Financial Strategy
- Certification: CIMA Professional Qualification
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Total Questions: 305
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Updated On: Jun 05, 2025
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Rated: 4.9 |
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Online Users: 610
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Question 1
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A company has:• $6 million market value of equity• $4 million market value of debt• WACC of 11.04%• Corporate income tax rate of 20%According to Modigliani and Miller's theory of capital structure with tax, what is the ungeared cost of equity?
Answer: A
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Question 2
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A company plans to acquire new machinery.It has two financing options; buy outright using a bank loan, or a finance lease.Which of the following is an advantage of a finance lease compared with a bank loan?
Answer: B
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Question 3
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A company has a covenant on its 5% long term corporate bond.• Covenant - The earnings must not fall below $7 millionThe bond has a nominal value of $60 million.It is currently trading at 80% of its nominal value.The projected earnings before interest and taxation for next year are $11.5 million.The company retains 80% of its earnings. It pays tax at 20%.Advise the Board of Directors which of the following covenant conditions will apply next year?
Answer: C
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Question 4
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A company has a cash surplus which it wishes to distribute to shareholders by a share repurchase rather thanpaying a special dividend.Which THREE of the following statements are correct?
Answer: A,B,D
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Question 5
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A company financed by equity and debt can be valued by discounting:
Answer: A
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