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CIMA Updated F3 Exam Questions and Answers by frazer

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CIMA F3 Exam Overview :

Exam Name: Financial Strategy
Exam Code: F3 Dumps
Vendor: CIMA Certification: CIMA Strategic
Questions: 393 Q&A's Shared By: frazer
Question 72

G pic wishes to borrow $5 million in 6 months, for a period of 3 months. A bank has quoted the following Forward Rate Agreement (FRA) rales:

3 v 9 6.55%-6.70% 6v9 6.70%-6 90%.

G pic can borrow at 0 75% above base rate, and the base rate is currently 6.25% Concerned that base rates may rise, G pic decides that it will hedge using an FRA

At the settlement date for the FRA, the base rate has risen to 7.50%

What is the effective interest rate paid by G pic for its borrowing?

Options:

A.

7.45

B.

7.30

C.

8.25

D.

7.65

Discussion
Question 73

A company proposes to value itself based on the net present value of estimated future cash flows.

 

Relevant data:

   • The cash flow for the next three years is expected to be £100 million each year

   • The cash flow after year 3 will grow at 2% to perpetuity

   • The cost of capital is 12%

The value of the company to the nearest $ million is:

Options:

A.

$966 million

B.

$1,260 million

C.

$889 million

D.

$834 million

Discussion
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Question 74

Which of the following is NOT an advantage of a share repurchase?

Options:

A.

To return surplus cash to shareholders by avoiding a one-off dividend

B.

To allow investors to sell shares if no active market currently exists

C.

To reduce the cost of capital of a company by increasing the gearing level.

D.

To enable the company to retain cash in the business for reinvestment

Discussion
Question 75

Using the CAPM, the expected return for a company is 11%. The market return is 8% and the risk free rate is 2%.

 

What does the beta factor used in this calculation indicate about the risk of the company?

Options:

A.

It has greater risk than the average market risk.

B.

It has lower risk than the average market risk.

C.

It has the same risk as the average market risk.

D.

It is not possible to tell from CAPM.

Discussion
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