Free Practice CIMA CIMAPRA19-F03-1-ENG Exam Questions 2025

Stay ahead with 100% Free F3 Financial Strategy (Online) CIMAPRA19-F03-1-ENG Dumps Practice Questions

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Total 305 Questions | Updated On: Jun 03, 2025

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Question 1

Company A is located in Country A, where the currency is the A$.

It is listed on the local stock market which was set up 10 years ago.

It plans a takeover of Company B, which is located in Country B where the currency is the B$, and where the

stock market has been operating for over 100 years.

Company A is considering how to finance the acquisition, and how the shareholders of Company B might

respond to a share exchange or cash (paid in B$).

Which of the following is likely to explain why the shareholders of Company B would prefer a share exchange

as opposed to a cash offer?

A : It would allow them to realise their investment and make a capital gain.

B : It would avoid them being exposed to foreign currency risk.

C : They would receive shares in a market that is likely to be more efficient.

D : It would enable them to benefit from the future performance of the combined entity.

Answer: D

Question 2

Which THREE of the following would be most important if a hospital wishes to review the effectiveness of its services?

A : The proportion of surgical procedures that are deemed to be successful.

B : Average waiting times for treatment.

C : Patient satisfaction ratings.

D : Staff costs compared to previous years.

E : Revenue generated from car park charges.

Answer: A,B,C

Question 3

An unlisted company operates in a niche market, exploring the west coast of Africa for new oiI reservoirs.

The oil exploration program has been successful in recent years and t now has a substantial amount of oil

reserves with a high level of certainty of being recoverable Under financial reporting regulations, oil still in the

ground is not recognised as an asset unit is extracted.

The expense of the exploration program has used up all the company’s available cash resources.

The company has denied to list or a stock market and raise finds through an initial public offering to finance

its drilling program.

Which of the following valuation methods in the appropriate to use in calculating an initial listing price for this

company?

A : Market capitalisation.

B : Framings valuation using the ratio of a multinational oil exploration company

C : Net asset valuation based on book values.

D : Discounted cash flow valuation

Answer: D

Question 4

When valuing an unlisted company, a P/E ratio for a similar listed company may be used but adjustments to

the P/E ratio may be necessary.

Which THREE of the following factors would justify a reduction in the proxy p/e ratio before use?

A : The relative lack of marketability of unlisted company shares.

B : A lower level of scrutiny and regulation for unlisted companies.

C : Unlisted companies being generally smaller and less established.

D : Unlisted companies being generally smaller and less established.

E : The forecast earnings growth being relatively higher in the unlisted company.

F : A profit item within the unlisted company's latest earnings which will not reoccur.

Answer: A,B,C

Question 5

Company W has received an unwelcome takeover bid from Company B. The offer is a share exchange of 3

shares in Company B for 5 shares in Company W or a cash alternative of $5.70 for each Company W share.

Company B is approximately twice the size of Company W based on market capitalisation. Although the two

companies have some common business interested the main aim of the bid is diversification for Company B.

Company W has substantial cash balances which the directors were planning to use to fund an acquisition.

These plans have not been announced to the market.

The following share price information is relevant.

Which of the following would be the most appropriate action by Company W's directors following receipt of

this hostile bid?

A : Change the Articles of Association to increase the percentage of shareholder votes required to approve atakeover.

B : Refer the bid to the country's competition authorities.

C : Write to shareholders explaining fully why the company's share price is under valued.

D : Pay a one-off special dividend.

Answer: C

Page: 1 / 61

Total 305 Questions | Updated On: Jun 03, 2025

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