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CIMA F3 Exam With Confidence Using Practice Dumps

Exam Code:
F3
Exam Name:
Financial Strategy
Certification:
Vendor:
Questions:
435
Last Updated:
Aug 18, 2025
Exam Status:
Stable
CIMA F3

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

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Financial Strategy Questions and Answers

Question 1

A company is planning a share repurchase programme with the following details:

   • Repurchased shares will be immediately cancelled.

   • The shares will be purchased at a premium to the market share price.

The current market share price is greater than the nominal value of the shares.

 

Which of the following statements about the impact of the share repurchase programme on the company's financial statements is correct? 

Options:

A.

The premium to the nominal value would be charged to retained earnings.

B.

The share capital figure would reduce by the nominal value of the shares purchased.

C.

The total value of the equity in its Statement of Financial Position would remain unchanged.

D.

The premium to the market value would be charged to the Income Statement.

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Question 2

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.

Question 3

A company is deciding whether to offer a scrip dividend or a cash dividend to its shareholders. 

Although the company has excellent long-term growth prospects, it is experiencing short-term profit and cash flow problems.

 

Which of the following statements is most likely to be a reason for choosing the scrip dividend?

Options:

A.

It is a way of raising additional finance to promote future growth.

B.

It is a way of increasing earnings per share.

C.

It is a way of encouraging shareholders to allow cash to be retained in the business.

D.

It is a way of increasing dividend per share.