Free CIMA CIMAPRA19-F03-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRA19-F03-1-ENG exam questions and correct answers

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Total 305 Questions | Updated On: Aug 19, 2026

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Question 1

A company has just received a hostile bid. Which of the following response strategies could be considered?

A : value non-current assets

B : ison pill strategy

C : ange the Articles of Association to amend voting rights

D : proach a White Knight

Answer: D

Question 2

Company A is located in Country A, where the currency is the A$.

It is listed on the local stock market which was set up 10 years ago.

It plans a takeover of Company B, which is located in Country B where the currency is the B$, and where the

stock market has been operating for over 100 years.

Company A is considering how to finance the acquisition, and how the shareholders of Company B might

respond to a share exchange or cash (paid in B$).

Which of the following is likely to explain why the shareholders of Company B would prefer a share exchange

as opposed to a cash offer?

A : would allow them to realise their investment and make a capital gain.

B : would avoid them being exposed to foreign currency risk.

C : ey would receive shares in a market that is likely to be more efficient.

D : would enable them to benefit from the future performance of the combined entity.

Answer: D

Question 3

When valuing an unlisted company, a P/E ratio for a similar listed company may be used but adjustments to

the P/E ratio may be necessary.

Which THREE of the following factors would justify a reduction in the proxy p/e ratio before use?

A : relative lack of marketability of unlisted company shares.

B : lower level of scrutiny and regulation for unlisted companies.

C : listed companies being generally smaller and less established.

D : listed companies being generally smaller and less established.

E : forecast earnings growth being relatively higher in the unlisted company.

F : profit item within the unlisted company's latest earnings which will not reoccur.

Answer: A,B,C

Question 4

A listed company in a high technology industry has decided to value its intellectual capital using the

Calculated Intangible Value method (CIV).

Relevant data for the company:

• Pays corporate income tax at 30%

• Cost of equity is 9%, pre-tax cost of debt is 7% and the WACC is 8%

• The value spread has been calculated as $26 million

Calculate the CIV for the company.

A : 228 million

B : 289 million

C : 531 million

D : 325 million

Answer: A

Question 5

Company W has received an unwelcome takeover bid from Company B. The offer is a share exchange of 3

shares in Company B for 5 shares in Company W or a cash alternative of $5.70 for each Company W share.

Company B is approximately twice the size of Company W based on market capitalisation. Although the two

companies have some common business interested the main aim of the bid is diversification for Company B.

Company W has substantial cash balances which the directors were planning to use to fund an acquisition.

These plans have not been announced to the market.

The following share price information is relevant.

Which of the following would be the most appropriate action by Company W's directors following receipt of

this hostile bid?

A : Change the Articles of Association to increase the percentage of shareholder votes required to approve atakeover.

B : fer the bid to the country's competition authorities.

C : ite to shareholders explaining fully why the company's share price is under valued.

D : y a one-off special dividend.

Answer: C

Page: 1 / 61

Total 305 Questions | Updated On: Aug 19, 2026

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