Free CIMA CIMAPRA19-F03-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRA19-F03-1-ENG exam questions and correct answers

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Total 305 Questions | Updated On: Mar 28, 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 : would allow them to realise their investment and make a capital gain.

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

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

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

Answer: D

Question 2

A listed company in a high technology industry has decided to value its intellectual capital using the

Calculated Intangible Value method (CIV).

Relevant data for the company:

• Pays corporate income tax at 30%

• Cost of equity is 9%, pre-tax cost of debt is 7% and the WACC is 8%

• The value spread has been calculated as $26 million

Calculate the CIV for the company.

A : 228 million

B : 289 million

C : 531 million

D : 325 million

Answer: A

Question 3

H Company has a fixed rate load at 10.0%, but wishes to swap to variable. It can borrow at LIBOR 8%.

The bank is currently quoting swap rates of 3.1% (bid) and 3.5% (ask).

What net rate will H Company pay if it enters into the swap?

A : BOR +6.5%

B : BOR +8%

C : BOR +6.9%

D : BOR +3.1%

Answer: C

Question 4

Which THREE of the following statements are correct?

A : portfolio can be diversified by increasing the number of securities in different industries held in the portfolio.

B : tematic risk can be eliminated in a diversified portfolio.

C : beta of a company's shares reflects systematic risk.

D : beta of 1 indicates that the investment is risk free.

E : security market line (SML) shows the relationship between systematic risk and return.

Answer: A,C

Question 5

The International Integrated Reporting Council (IIRC) was formed in August 2010 and brings together a

cross-section of representatives from a wide variety of business sectors.

The primary purpose of the IIRC's framework is to help enable an organsation to communicate how it:

A : nimises the environmental impact of its business processes.

B : eates value in the short, medium and long term.

C : ntributes positively to the economic well being of the environment in which it operates.

D : ures that the conflicting needs of different stakeholder groups are met in an optimal manner.

Answer: B

Page: 1 / 61

Total 305 Questions | Updated On: Mar 28, 2025

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