CIMA F3 Exam With Confidence Using Practice Dumps

A UK company enters into a 5 year borrowing with bank P at a floating rate of GBP Libor plus 3%

It simultaneously enters into an interest rate swap with bank Q at 4.5% fixed against GBP Libor plus 1.5%

What is the hedged borrowing rate, taking the borrowing and swap into account?

Give your answer to 1 decimal place.

Company ADE is an unlisted company; it needs to raise a significant amount of finance to fund future expansion. The directors are considering listing the company on the local stock exchange The following discussions have taken place between some of the directors:

Director A - We consider a public issue of bonds in the capital markets, we don't need to list to issue the bonds which will save time and money.

Director B - We should list on the Alternative Investment Market (AIM) and not the main market to avoid any regulatory requirements

Director C - We should remain unlisted; we can access an unlimited amount of equity finance through a rights issue

Director D - Listing will increase Company ADE's ability to raise new equity and debt finance in the future.

Director E - If we list, Company ADE will be a more likely target for a takeover than if we remain unlisted.

Which TWO of the directors' statements are correct?

Which THREE of the following would be of most interest to lenders deciding whether to provide long-term debt to a company?