2026 CIMA CIMAPRA19-F03-1: F3 Financial Strategy Useful Valid Test Labs

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CIMA CIMAPRA19-F03-1 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Financial risks20%- Managing financial risks
  • 1. Hedging and derivatives
  • 2. Counterparty risk
  • 3. Currency and interest rate risks
Topic 2: Business valuation40%- Corporate finance and valuation
  • 1. Cost of capital (WACC, CAPM)
  • 2. Corporate restructuring and reconstructions
  • 3. Valuation methods (DCF, Multiples, Asset-based)
  • 4. Mergers, acquisitions, and divestments
Topic 3: Financial policy decisions15%- Formulation of financial strategy
  • 1. Sustainability reporting
  • 2. Evaluating strategic objectives
  • 3. Financial management policies
Topic 4: Sources of long-term funds25%- Financing and dividend decisions
  • 1. Relationship between investment, financing, and dividends
  • 2. External factors influencing financial strategy
  • 3. Capital structure decisions

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CIMA F3 Financial Strategy Sample Questions (Q162-Q167):

NEW QUESTION # 162
Company A needs to raise AS500 mi lion to invest in a new project and is considering using a pub ic issue of bonds to finance the investment.
Which THREE of the following statements-relating to this bond issue are true?

Answer: A,B,C

Explanation:
B - The largest issuer of bonds is the government.
C - Issuing bonds in the capital markets allows entities to borrow large amounts.
E - Corporate bond issues are normally underwritten.
(Companies do not have to be listed to issue bonds, and public bond markets are regulated, not unregulated.)


NEW QUESTION # 163
A company has in a 5% corporate bond in issue on which there are two loan covenants.
* Interest cover must not fall below 3 times
* Retained earnings for the year must not fall below $3.5 million
The Company has 200 million shares in issue.
The most recent dividend per share was $0.04.
The Company intends increasing dividends by 10% next year.
Financial projections for next year are as follows:

Advise the Board of Directors which of the following will be the status of compliance with the loan covenants next year?

Answer: D


NEW QUESTION # 164
PYP is a listed courier company. It is looking to raise new finance to fit each of its delivery vans with new equipment to allow improved parcel tracking for customers The senior management team of PYP have decided on a 10-year secured bond to finance this investment-
Which TWO of the following variables are most likely to decrease the yield to maturity of the bond?

Answer: A,C


NEW QUESTION # 165
A company's directors plan to increase gearing to come in line with the industry average of 40%. They need to know what the effect will be on the company's WACC.
According to traditional theory of gearing the WACC is most likely to:

Answer:

Explanation:


NEW QUESTION # 166
A company has convertible bonds in issue.
The following debt is apply (31 December 20X0):
* Conversion ratio- 20 shares for each $130 bond.
* Current share price - $4 50
* Expected annual growth in share price - 5%
Advise the bond Holder at which date the convers on would be worthwhile?

Answer: A


NEW QUESTION # 167
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