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CIMA F3 Exam With Confidence Using Practice Dumps

Exam Code:
F3
Exam Name:
Financial Strategy
Certification:
Vendor:
Questions:
393
Last Updated:
Mar 8, 2026
Exam Status:
Stable
CIMA F3

F3: CIMA Strategic Exam 2025 Study Guide Pdf and Test Engine

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Financial Strategy Questions and Answers

Question 1

A listed company in a high growth industry, where innovation is a key driver of success has always operated a residual dividend policy, resulting in volatility in dividends due to periodic significant investments in research and development.

 

The company has recently come under pressure from some investors to change its dividend policy so that shareholders receive a consistent growing dividend. In addition, they suggested that the company should use more debt finance. 

 If the suggested change is made to the financial policies, which THREE of the following statements are true?

Options:

A.

It may give a signal to the market that the company is entering a period of stable growth. 

B.

There may be a change to the shareholder profile due to 'the clientele effect'. 

C.

The directors will not have to take shareholder dividend preferences into consideration in future. 

D.

Retained earnings have a lower cost than debt finance.

E.

The company's financial risk will increase due to its increased use of debt finance.

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Question 2

The directors of a unlisted manufacturing company have prepared a valuation of their company using the price-earning method.

Their calculation is:

Value if the company‘s equity = $6 million x 10 =$60 million where.

$6 million is the company’s reported profit before interested and tax in the most recent accounting period and

10 is the average price-earnings ratio for all listed companies

Which THREE of the following are weakness of this valuation?

Options:

A.

The equity result needs to be uplifted in recognition that this is an unlisted company.

B.

The price-earnings valuation method gives a value for the entire entity not Just a value of the equity.

C.

A forecast of sustainable profit should have been used instead of a historical figure

D.

Profit after tax should have been used in the calculation instead of profit before interest and tax.

E.

The price-earnings ratio should have been an average for companies in the same industry sector rather than alI listed companies

Question 3

Company M is a listed company in a highly technical service industry.

The directors are considering making a cash offer for the shares in Company Q, an unquoted company in the same industry.

 

Relevant data about Company Q:

   • The company has seen consistent growth in earnings each year since it was founded 10 years ago.

   • It has relatively few non-current assets.

   • Many of the employees are leading experts in their field. A recent exercise suggested that the value of the company's human capital exceeded the value of its tangible assets.

The directors and major shareholders of Company Q have indicated willingness to sell the company.

Before negotiations become too advanced, the directors of Company M are considering the benefits to their company that would follow the acquisition.

 

Which THREE of the following are the most likely benefits of the acquisition to Company M's shareholders?

Options:

A.

Access to technical expertise.

B.

Reduction of risk through diversification.

C.

Improved asset backing for borrowing due to the acquisition of intangible assets.

D.

Gain economies of scale.

E.

Improve earnings per share (EPS).