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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:
Jan 3, 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 company has a financial objective of maintaining a gearing ratio of between 30% and 40%, where gearing is defined as debt/equity at market values. 

The company has been affected by a recent economic downturn leading to a shortage of liquidity and a fall in the share price during 20X1.

 

On 31 December 20X1 the company was funded by:

•    Share capital of 4 million $1 shares trading at $4.0 per share.

•    Debt of $7 million floating rate borrowings.

 

The directors plan to raise $2 million additional borrowings in order to improve liquidity.  

They expect this to reassure investors about the company's liquidity position and result in a rise in the share price to $4.2 per share.

 

Is the planned increase in borrowings expected to help the company meet its gearing objective?

Options:

A.

No, gearing would increase but the gearing objective would be met both before and after the announcement.

B.

No, gearing would increase and the gearing objective would be exceeded both before and after the announcement.

C.

No, gearing would increase and the gearing objective would be met before the announcement but exceeded after the announcement.

D.

Yes, gearing would fall and the gearing objective would be exceeded before the announcement but met after the announcement.

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Question 2

X exports goods to customers in a number of small countries Asia. At present, X invoices customers in X's home currency.

The Sales Director has proposed that X should begin to invoice in the customers currency, and the Treasurers considering the implications of the proposal.

Which TWO of the following statement are correct?

Options:

A.

X may be able to sell the receipts forward.

B.

If the proposal is adopted, X will have a lower effective sales price per unit due to exchange rate fluctuations.

C.

X will know advance the amount of home currency it will receive for the export sales.

D.

The overseas customers may have difficulty obtaining X's name currency with which to make the purchases, so the Sales Director’s proposal may increase sales.

E.

The customer will tear the foreign exchange risk and will only buy from X if they are prepared to accept this.

Question 3

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.

Options: