Cima certkiller f3 Exam Questions Tutorials by Wiktoria q78 vce pdf

Page: 14 / 29

Exam Name:	Financial Strategy
Exam Code:	F3 Dumps
Vendor:	CIMA	Certification:	CIMA Strategic
Questions:	393 Q&A's	Shared By:	wiktoria

Question 56

An unlisted company is attempting to value its equity using the dividend valuation model.

Relevant information is as follows:

• A dividend of $500,000 has just been paid.

• Dividend growth of 8% is expected for the foreseeable future.

• Earnings growth of 6% is expected for the foreseeable future.

• The cost of equity of a proxy listed company is 15%.

• The risk premium required due to the company being unlisted is 3%.

The calculation that has been performed is as follows:

Equity value = $540,000 / (0.18 - 0.08) = $5,400,000

What is the fault with the calculation that has been performed?

Options:

The cost of equity used in the calculation should have been 12% (15% subtract 3%).

The dividend cashflow used should have been $500,000 rather than $540,000.

The dividend growth rate is unsuitable given that earning growth is lower than dividend growth.

The cost of equity used in the calculation should have been 15%; no adjustment was necessary.

Discussion

Question 57

A company generates and distributes electricity and gas to households and businesses.

Forecast results for the next financial year are as follows:

Questions 57

The Industry Regulator has announced a new price cap of $1.50 per Kilowatt.

The company expects this to cause consumption to rise by 10% but costs would remained unaltered.

The price cap is expected to cause the company's net profit to fall to:

Options:

$47.5 million profit

$27.5 million profit

$20.0 million profit

$35.0 million loss

Discussion

Question 58

If a company's bonds are currently yielding 8% in the marketplace, why would the entity's cost of debt be lower than this?

Options:

There should be no difference; the cost of debt is the same as the bond's market yield.

Interest is deductible for tax purposes.

The company's credit rating has changed.

Market interest rates have decreased.

Discussion

Inaya

Passed the exam. questions are valid. The customer support is top-notch. They were quick to respond to any questions I had and provided me with all the information I needed.

Cillian May 2, 2026

That's a big plus. I've used other dump providers in the past and the customer support was often lacking.

Erik

Hey, I have passed my exam using Cramkey Dumps?

Freyja May 9, 2026

Really, what are they? All come in your pool? Please give me more details, I am going to have access their subscription. Please brother, give me more details.

Anaya

I found so many of the same questions on the real exam that I had already seen in the Cramkey Dumps. Thank you so much for making exam so easy for me. I passed it successfully!!!

Nina May 22, 2026

It's true! I felt so much more confident going into the exam because I had already seen and understood the questions.

Nell

Are these dumps reliable?

Ernie May 18, 2026

Yes, very much so. Cramkey Dumps are created by experienced and certified professionals who have gone through the exams themselves. They understand the importance of providing accurate and relevant information to help you succeed.

Conor

I recently used these dumps for my exam and I must say, I was impressed with their authentic material.

Yunus May 22, 2026

Exactly…….The information in the dumps is so authentic and up-to-date. Plus, the questions are very similar to what you'll see on the actual exam. I felt confident going into the exam because I had studied using Cramkey Dumps.

Question 59

Company A is identical in all operating and risk characteristics to Company B, but their capital structures differ.

Company B is all-equity financed. Its cost of equity is 17%.

Company A has a gearing ratio (debt:equity) of 1:2. Its pre-tax cost of debt is 7%.

Company A and Company B both pay corporate income tax at 30%.

What is the cost of equity for Company A?

Options:

20.5%

21.2%

22.0%

17.0%