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CIMA F3 Exam Dumps Questions and Answers

Exam Code: F3
Certification: CIMA Strategic level
Vendor: CIMA
Last Update: Dec 3, 2024
Questions: 435 With Expert Explanation
10  Customers Passed CIMA F3
89%  Average Success In Real Exam
94%  Questions came word by word from this dump
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Financial Strategy Questions and Answers

Questions 1

Select whether the following statements are true or false with regard to Modigliani and Miller's dividend policy theory.

Options:

Questions 2

A company is planning a new share issue.

The funds raised will be used to repay debt on which it is currently paying a high interest rate.

Operating profit and dividends are expected to remain unchanged in the near future.

If the share issue is implemented, which THREE of the following are most likely to increase?

Options:

A.

The cost of equity

B.

The number of shares in issue

C.

Next year's payment of corporate income tax

D.

The gearing (book value of debt as a percentage of the book value of equity + debt)

E.

Interest cover

Questions 3

Company M's current profit before interest and taxation is $5.0 million.

It has a long-term 10% corporate bond in issue with a nominal value of $10 million.

The rate of corporate tax is 25%.

It plans to continue to pay out 50% of its earnings in dividends and earnings are expected to grow by 3% each year in perpetuity.

Its cost of equity is 10%.

 

Using the dividend growth model, advise the Board of Directors of Company M which of the following provide a reasonable valuation of Company M's equity?

Options:

A.

$73.6 million

B.

$22.1 million

C.

$44.1 million

D.

$50.1 million

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