CIMA Related Exams
F3 Exam
The CIMA F3 exam syllabus encompasses a wide range of financial strategy concepts, including:
The CIMA F3 and P3 exams are part of the Strategic Level of the CIMA (Chartered Institute of Management Accountants) qualification, but they focus on different areas:
ART manufactures traditional scooters. It has an equity beta of 1.4 and is financed entirely by equity. It plans to continue to be all-equity financed in future.
It is considering producing a range of electric scooters
GGG is a comparable quoted electric scooter manufacturer GGG has an equity beta of 2 4 reflecting its high level of gearing (the ratio of debt to equity is VI using market values).
The risk-free rate is 5%, and the market premium is 6%. The rate of corporation tax is 20%
What is the recommended discount rate that ART should use to assess the project to manufacture electric scooters?
An analyst has valued a company using the free cash flow valuation model.
The analyst used the following data in determining the value:
• Estimated free cashflow in 1 year's time = $100,000
• Estimated growth in free cashflow after the first year = 5% each year indefinitely
• Appropriate cost of equity = 10%
The result produced by the analyst was as follows:
Value of equity = $100,000 (1+0.05)/0.10 = $1,050,000
The analyst made a number of errors in determining the value.
By how much has the analyst undervalued the company?
A company needs to raise $20 million to finance a project.
It has decided on a rights issue at a discount of 20% to its current market share price.
There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per share.
Calculate the terms of the rights issue.