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To take the CIMA F3 Exam, candidates must have completed the CIMA Operational and Management levels or hold an equivalent qualification. It is recommended that candidates also have practical experience in financial management or related areas. F3 Exam is computer-based and is available to take at CIMA-approved test centers worldwide.
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CIMA F3 exam covers a wide range of topics related to financial management, including financial analysis, capital budgeting, risk management, and investment decision-making. F3 exam is designed to test candidates' ability to analyze financial information, develop financial strategies, and make informed decisions that will help their organizations achieve their financial goals. To prepare for the exam, candidates must have a strong understanding of financial concepts and principles, as well as experience working in financial roles. Overall, the CIMA F3 Certification is an excellent way for financial professionals to demonstrate their expertise and advance their careers in the field of financial management.
NEW QUESTION # 244
Delta and Kappa both wish to borrow $50m.
Delta can borrow at a fixed rate of 12% or at a floating rate of the risk-free rate +3% Kappa can borrow at 15% fixed or the risk-free rate +4%.
Delta wishes a variable rate loan and Kappa a fixed rate loan The bank for the two companies suggests a swap arrangement The two companies agree to a swap arrangement, sharing savings equally What is the effective swap rate for each company?
Answer: D
Explanation:
Delta: 12% fixed or rf + 3% floating
Kappa: 15% fixed or rf + 4% floating
Delta's advantage:
Fixed: 3% better (15 # 12)
Floating: 1% better (rf+4 # (rf+3))
Comparative advantage is in fixed; total potential gain from a swap = 3% # 1% = 2%, shared equally # 1% saving each.
So:
Delta (wants floating): (rf + 3%) # 1% = rf + 2%
Kappa (wants fixed): 15% # 1% = 14%
So D: Delta pays rf + 2%, Kappa pays 14%.
NEW QUESTION # 245
ADC is planning to acquire DEF in order to benefit from the expertise of DEF's owner 'managers Both are Listed companies. ADC is trying to decide whether to offer cash or shares in consideration for DEF's shares.
Which THREE of the following are advantages to ABC of offering shares to acquire CEF?
Answer: C,D,F
Explanation:
The question asks for advantages to the acquiring company (ADC/ABC) of using shares rather than cash to pay for DEF.
C). It incentivises DEF to continue creating value for the combined group If DEF's shareholders (and possibly managers) receive shares in ADC, they now own part of the combined business. That aligns their interests with ADC's existing shareholders and encourages them to help grow the value of the group.
E). The risk of poor future performance of the acquisition is shared with the DEF company shareholder.
If ADC pays with shares, DEF's shareholders share in both the upside and downside. If the acquisition underperforms, the fall in value is shared instead of all the risk resting on ADC's original shareholders. That's an advantage for ADC.
F). It preserves liquidity
Paying with shares means ADC does not need to use up cash or raise new debt. This preserves cash balances and borrowing capacity, which is a clear advantage.
Why not the others?
A (sharing benefits of future growth with DEF shareholders) is actually a cost from ADC's existing shareholders' viewpoint - they give away more of the upside.
B dilution of ownership is also a disadvantage, not an advantage.
D a tax saving for ABC - the tax impact is usually more relevant for sellers or when using debt, not typically a direct advantage of share consideration to the acquirer.
NEW QUESTION # 246
Three companies are quoted on the New York Stock Exchange. The following data applies:
Which of the following statements is TRUE?
Answer: B
Explanation:
Correct answer: D. Companies A and B have the same business risk
Business risk is measured by asset beta.
A and B both have asset beta = 1.16, so same business risk.
C has higher asset beta (1.20), so highest business risk.
NEW QUESTION # 247
A company's Board of Directors is assessing the likely impact of financing future new projects using either equity or debt.
The directors are uncertain of the effects on key variables.
Which THREE of the following statements are true?
Answer: A,E,F
NEW QUESTION # 248
Company XXY operates in country X with the X$ as its currency. It is looking to acquire company ZZY which operates in country Z with the Z$ as its currency.
The assistant accountant at Company XXY has started to prepare an initial valuation of Company ZZY's equity for the first 3 years, however their valuation is incomplete. TBC' in the table below indicates that her calculations have yet to be completed.
The following information is relevant:
What is the correct figure (to the nearest million S) to include in year 3 as the present value in X$ million?
Answer: C
Explanation:
Free cash flow year 3 = Z$240m
Spot rate now: Z$1 = X$2
Inflation: X 2%, Z 4% # expected depreciation of Z$ via PPP:
Factor k=1.021.04=51/52k = \frac{1.02}{1.04} = 51/52k=1.041.02=51/52
Year-3 expected rate:
S3=2×k3#2×0.9434=1.8868 X/ZS_3 = 2 \times k
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