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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 7, 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

The Board of Directors of a listed company wish to estimate a reasonable valuation of the entire share capital of the company in the event of a takeover bid.

The company's current profit before taxation is $10 0 million.

The rate of corporate tax is 20%.

The average P/E multiple of listed companies in the same industry is 10 times current earnings.

The P/E multiple of recent takeovers in the same industry have ranged from 11 times to 12 times current earnings.

The average P/E multiple of the top 100 companies on the stock market is 16 times current earnings.

Advise the Board of Directors which of the following is a reasonable estimate of a range of values of the entire share capital in the event of a bid being made for the whole company?

Options:

A.

Minimum = $110 million, and maximum = $120 million.

B.

Minimum = $88 million, and maximum = $96 million.

C.

Minimum = S100 million, and maximum = $120 million.

D.

Minimum = S80 million, and maximum = $128 million.

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Question 2

A company raised fixed rate bank finance together with an interest rate swap for the same term and same principal value to pay floating receive fixed rate interest on an annual basis.

 

Which THREE of the following statements are correct?

Options:

A.

The company has effectively obtained floating rate debt.

B.

On the first day of this arrangement, the company receives the principal borrowed from the bank and pays this across to the swap counterparty.

C.

LIBID (London Interbank Bid Rate) is normally used as the reference rate for determining interest due under the swap.

D.

Under the swap, interest is exchanged every year.

E.

The swap contract is normally a contract between a company and a bank.

Question 3

An unlisted company wishes to obtain an estimated value for its shares in anticipation of a private sale of a large parcel of shares.

 

Relevant data for the unlisted company:

   • It has a residual dividend policy. 

   • It has earnings that are highly sensitive to underlying economic conditions.

   • It is a small business in a large industry where there are listed companies but there are none with a similar capital structure. 

 

The company intends to base valuations on the cost of equity of a proxy company after adjusting for any differences in capital structure where appropriate.

 

Which of the following methods is likely to give the most accurate equity value for this unlisted company?

Options:

A.

Dividend valuation model.

B.

Discounted cash flow analysis at WACC based on free cash flow to equity. 

C.

Net asset valuation.

D.

P/E based valuation using the P/E of a similar listed company in the same industry.