CIMA Updated F3 Exam Questions and Answers by pia

The Treasurer of Z intends to use interest rate options to set an interest rate cap on Z’s borrowings.

Which of the following statement is correct?

A company is reporting under IFRS 7 Financial Instruments: Disclosures for the first time and the directors are concerned about whether this will lead to the disclosure of information that could affect the company's share price.

The company is based in a country that uses the A$ but 40% of revenue relates to export sales to the USA and priced in US$. 

When the company reports under IFRS 7 for the first time, the share price is most likely to:

The shares of a company in a high technology industry have been listed on a stock exchange for 10 years. During this period, it has paid no dividends but invested all retained earnings in growth. The company is now entering a period of relatively stable growth and the directors are considering beginning to pay dividends They are reviewing the following suggestions made by members of the board:

• Pay cash dividends linked to growth in earnings

• Use a residual theory approach to establish cash dividends

• Issue scrip dividends (shares instead of cash)

• Continue to pay no dividends as dividends are irrelevant to the value of the company

Which THREE of the following are correct statements for the directors to take into consideration when making a decision about future dividend policy?

A listed company is planning a share repurchase. 

The following data applies:

   • There are 10 million shares in issue

   • The  share repurchase will involve buying back 20% of the shares at a price of $0.75

   • The company is holding $2 million cash

   • Earnings for the current year ended are $2 million

The Directors are concerned about the impact that this repurchase programme will have on the company's cash balance and current year earnings per share (EPS) ratio.

Advise the directors which of the following statements is correct?