Total 305 Questions |
Updated On: Apr 08, 2025
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Free Practice CIMA CIMAPRA19-F03-1-ENG Exam Questions 2025
Stay ahead with 100% Free F3 Financial Strategy (Online) CIMAPRA19-F03-1-ENG Dumps Practice Questions
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Question 1
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
Question 2
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 3
An unlisted company operates in a niche market, exploring the west coast of Africa for new oiI reservoirs.
The oil exploration program has been successful in recent years and t now has a substantial amount of oil
reserves with a high level of certainty of being recoverable Under financial reporting regulations, oil still in the
ground is not recognised as an asset unit is extracted.
The expense of the exploration program has used up all the company’s available cash resources.
The company has denied to list or a stock market and raise finds through an initial public offering to finance
its drilling program.
Which of the following valuation methods in the appropriate to use in calculating an initial listing price for this
company?
Answer: D
Question 4
A company’s statement of financial position includes non-current assets which are leased, the tax regime
follows the accounting treatment.
Which cash flows should be discounted when evaluating the cost of lease finance?
Answer: B
Question 5
Which THREE of the following are considered in detail in IFRS 7 Financial Instruments: Disclosures?
Answer: A,C
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Total 305 Questions |
Updated On: Apr 08, 2025
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