BTW, DOWNLOAD part of Actual4dump CIMAPRA19-F03-1 dumps from Cloud Storage: https://drive.google.com/open?id=1FbgoZSrHTZ8_WHjz7h7SoG6OUXu07zWC
The third format is desktop CIMAPRA19-F03-1 practice exam software that can be accessed easily after installing it on your Windows PC or Laptop. These formats are there so that the students can use them as per their unique needs and prepare successfully for CIMAPRA19-F03-1 the on first try. The CIMAPRA19-F03-1 mock tests are specially built for you to evaluate what you have studied. These F3 Financial Strategy (CIMAPRA19-F03-1) practice exams (desktop and web-based) are customizable, which means that you can change the time and questions according to your needs. Our CIMAPRA19-F03-1 practice tests teach you time management so you can pass the F3 Financial Strategy (CIMAPRA19-F03-1) certification exam.
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Financial Risks | 20% | - Types of financial risk
- Risk measurement and assessment
|
| Topic 2: Business Valuation | 40% | - Mergers, acquisitions and divestments
|
| Topic 3: Financial Policy Decisions | 15% | - Strategic financial objectives and stakeholder impact
|
| Topic 4: Sources of Long-term Funds | 25% | - Equity finance
- Capital structure theories and WACC
|
>> Exam CIMAPRA19-F03-1 Assessment <<
Now in such a Internet so developed society, choosing online training is a very common phenomenon. Actual4dump is one of many online training websites. Actual4dump's online training course has many years of experience, which can provide high quality learning material for examinee participating in CIMA Certification CIMAPRA19-F03-1 Exam and satisfy all the needs of the students.
NEW QUESTION # 367
A company is financed by debt and equity and pays corporate income tax at 20%.
Its main objective is the maximisation of shareholder wealth.
It needs to raise $200 million to undertake a project with a positive NPV of $10 million.
The company is considering three options:
* A rights issue.
* A bond issue.
* A combination of both at the current debt to equity ratio.
Estimations of the market values of debt and equity both before and after the adoption of the project have been calculated, based upon Modigliani and Miller's capital theory with tax, and are shown below:
Under Modigliani and Miller's capital theory with tax, what is the increase in shareholder wealth?
Answer: A
Explanation:
Current values (before project):
Equity = 1,100
Debt = 500
Firm value = 1,600
Project cost = 200; NPV = +10.
After the project:
Financed by rights issue (equity only)
Equity = 1,310 # increase of 210
But shareholders have to inject 200 cash themselves.
Net gain in shareholder wealth = 210 # 200 = 10
Financed by bond issue (all debt)
Equity = 1,150 # increase of 50
No new equity cash is put in by shareholders.
Net gain in shareholder wealth = 50
This equals: project NPV (10) + tax shield on extra debt (0.20 × 200 = 40).
Financed by mix of debt & equity at existing D/E
Equity = 1,260 # increase of 160
New equity raised # 137 (since extra debt is 63, total 200).
Net gain = 160 # 137 = 23 (NPV 10 + extra tax shield # 13).
The company's objective is maximisation of shareholder wealth, so it should choose the financing that gives the highest net increase, which is the bond issue (all debt) with a gain of $50m to equity holders.
This is exactly what Modigliani & Miller with corporate tax predicts: increasing gearing creates value for shareholders via the interest tax shield.
NEW QUESTION # 368
A company is currently all-equity financed with a cost of equity of 9%.
It plans to raise debt with a pre-tax cost of 3% in order to buy back equity shares.
After the buy-back, the debt-to-equity ratio at market values will be 1 to 2.
The corporate income tax rate is 25%.
Which of the following represents the company's cost of equity after the buy-back according to Modigliani and Miller's Theory of Capital Structure with taxes?
Answer: C
Explanation:
Workings (Modigliani & Miller with tax):
Current (unlevered) cost of capital ku=9%k_u = 9\%ku=9%
Cost of debt kd=3%k_d = 3\%kd=3%
Tax rate T=25%T = 25\%T=25%
Target D/E=1/2=0.5D/E = 1/2 = 0.5D/E=1/2=0.5
Formula with tax:
ke=ku+(ku#kd)(1#T)DEk_e = k_u + (k_u - k_d)(1-T)\frac{D}{E}ke=ku+(ku#kd)(1#T)ED ke=9%+(9%#3%)
×0.75×0.5=9%+6%×0.375=9%+2.25%=11.25%#11.3%k_e = 9\% + (9\% - 3\%) \times 0.75 \times 0.5 = 9\%
+ 6\% \times 0.375 = 9\% + 2.25\% = 11.25\% \approx 11.3\%ke=9%+(9%#3%)×0.75×0.5=9%+6%×0.
375=9%+2.25%=11.25%#11.3%
So the nearest option is 11.3% (C).
NEW QUESTION # 369
Which TIIRCC of the following are most likely be primary objectives for a newly established, unincorporated entity in the service sector?
Answer: A,E
NEW QUESTION # 370
A company is financed as follows:
* 400 million $1 shares quoted at $3.00 each.
* $800 million 5% bonds quoted at par.
The company plans to raise $200 million long term debt to finance a project with a net present value of $100 million.
The bank that is providing the debt is insisting on a maximum gearing level covenant.
Gearing will be based on market values and calculated as debt/(debt + equity).
What is the lowest figure for the gearing covenant that the bank could impose without the company breaching the agreement?
Answer: D
NEW QUESTION # 371
CI IJ has decided to move its production plant to overseas country X.
This would make the product cheaper to produce. The technology used to make the product is very advanced and some of the skilled staff would have to move to country X.
The Production Director has identified that there are some political risks in moving to county X.
For each of the political risks of moving to country X shown below, select the correct method for reducing the risk.
Answer:
Explanation:
NEW QUESTION # 372
......
Briefly speaking, our CIMAPRA19-F03-1 training guide gives priority to the quality and service and will bring the clients the brand new experiences and comfortable feelings. For we have engaged in this career for years and we are always trying our best to develope every detail of our CIMAPRA19-F03-1 study quiz. With our CIMAPRA19-F03-1 exam questions, you will find the exam is just a piece of cake. What are you still hesitating for? Hurry to buy our CIMAPRA19-F03-1 learning engine now!
CIMAPRA19-F03-1 Test Simulator Online: https://www.actual4dump.com/CIMA/CIMAPRA19-F03-1-actualtests-dumps.html
BONUS!!! Download part of Actual4dump CIMAPRA19-F03-1 dumps for free: https://drive.google.com/open?id=1FbgoZSrHTZ8_WHjz7h7SoG6OUXu07zWC