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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:
Oct 25, 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 table below shows the forecast for a company's next financial year:

 

 

The forecast incorporates the following assumptions:

   • 25% of operating costs are variable

   • Debt finance comprises a $400 million fixed rate loan at 5%

   • Corporate income tax is paid at 25%

 

The company plans to do the following next year from the forecast earnings on the assumption that earnings will be equivalent to free cash flow: 

   • Pay a total dividend of $20 million

   • Invest $40 million in new projects

 

What is the maximum % reduction in operating activity that could occur next year before the company's dividend and investment plans are affected?

 

Give your answer to the nearest 0.1%.

 

   

Options:

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Question 2

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.

Question 3

A new company was set up two years ago using the personal financial resources of the founders.

These funds were used to acquire suitable premises.

The company has entered into a long-term lease on the premises which are not yet fully fitted out.

The founders are considering requesting loan finance from the company's bank to fund the purchase of custom-made advanced technology equipment.

No other companies are using this type of equipment.

The company expects to continue to be profitable for the forseeable future.

It re-invests some of its surplus cash in on-going essential research and development.

 

Which THREE of the following features are likely to be considered negatives by the bank when assessing the company's credit-worthiness?

Options:

A.

The equipment is advanced technology custom-made equipment. 

B.

The company will continue to remain profitable and to generate net cash.

C.

The company premises are on a long-term lease but are not yet fully fitted out.

D.

The founders invested their personal financial resources in the company.

E.

Essential on-going research and development expenditure is required.