CIMA F3 Financial Strategy CIMAPRA19-F03-1 Dumps in PDF

Which THREE of the following are considered in detail in IFRS 7 Financial Instruments: Disclosures?

Two companies that operate in the same industry have different Price/Earnings (P/E) ratios as follows:

Which of the following is the most likely of the different P/E ratios?

A company is owned by its five directors who want to sell the business.   Current profit after tax is $750,000.   The directors are currently paid minimal salaries, taking most of their incomes as dividends. After the company is sold, directors' salaries will need to be increased by $50,000 each year in total. A suitable Price/Earnings (P/E) ratio is 7, and the rate of corporate tax is 20%.
What is the value of the company using a P/E valuation?

Company A is unlisted and all-equity financed. It is trying to estimate its cost of equity. 
The following information relates to another company, Company B, which operates in the same industry as Company A and has similar business risk:
Equity beta = 1.6       Debt:equity ratio  40:60 The rate of corporate income tax is 20%. The expected premium on the market portfolio is 7% and the risk-free rate is 5%.
What is the estimated cost of equity for Company A?
Give your answer to one decimal place.
 ? % 

A company intends to sell one of its business units, Company R by a management buyout (MBO). A selling price of $100 million has been agreed. The managers are discussing with a bank and a venture capital company (VCC) the following financing proposal:

The VCC requires a minimum return on its equity investment in the MBO of 30% a year on a compound basis over 5 years.
What is the minimum TOTAL equity value of Company R in 5 years time in order to meet the VCC's required return?
Give your answer to one decimal place.
$  ? million 

Company A is a large listed company, with a wide range of both institutional and private shareholders.  It is planning a takeover offer for Company B. Company A has relatively low cash reserves and its gearing ratio of 40% is higher than most similar companies in its industry.
Which TWO of the following would be the most feasible ways of Company A structuring an offer for Company B?

Company M plans to bid for Company J. Company M has 20 million shares in issue and a current share price of $10.00 before publicly announcing the planned takeover. Company J has 10 million shares in issue and a current share price of $4.00. The directors of Company M are considering an all-share bid of 1 Company M shares for 2 Company J shares. Synergies worth $20m are expected from the acquisition.
What is the likely change in wealth for Company M's shareholders (in total) if the bid is accepted?
Give your answer to the nearest $ million.
$  ? million 

Company A plans to acquire Company B. Both firms operate as wholesalers in the fashion industry, supplying a wide range of ladies' clothing shops. Company A sources mainly from the UK, Company B imports most of its supplies from low-income overseas countries. Significant synergies are expected in management costs and warehousing, and in economies of bulk purchasing.
Which of the following is likely to be the single most important issue facing Company A in post-merger integration?