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: Jul 29, 2025

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Question 1

The Board of Directors of Company T is considering a rights issue to fund a new investment opportunity

which has a zero NPV.

The Board of Directors wishes to explain to shareholders what the theoretical impact on their wealth will be as

a result of different possible actions during the rights issue.

Which THREE of the following statements in respect of theoretical shareholder wealth are true?

A : shareholders exercise their full rights there will be no impact on their wealth.

B : the shareholders allow their rights to lapse (do nothing) there will be no impact on their wealth.

C : shareholders sell their entire rights entitlement there will be no impact on their wealth.

D : the shareholders only partially exercise their rights and allow the remainder to lapse there will be no impact on their wealth

E : shareholders partially exercise their rights and sell the remaining rights entitlement there will be no impact on their wealth.

Answer: A,C

Question 2

Company U has made a bid for the entire share capital of Company B.

Company U is offering the shareholders in Company B the option of either a share exchange or a cash

alternative.

Advise the shareholders in Company B which THREE of the following would be considered disadvantages of

accepting the cash consideration?

A : h consideration is certain whereas Company U's future share price performance is uncertain.

B : terest rates on deposit accounts are currently at a historic low and are expected to remain low.

C : mpany U is not expected to change its dividend policy post-acquisition.

D : xation is payable on realised capital gains.

E : ere will be no opportunity to participate in the future economic success of Company U.

Answer: A,B,D

Question 3

Company P is a large unlisted food-processing company.

Its current profit before interest and taxation is $4 million, which it expects to be maintainable in the future.

It has a $10 million long-term loan on which it pays interest of 10%.

Corporate tax is paid at the rate of 20%.

The following information on P/E multiples is available:

Which of the following is the best indication of the equity value of Company P?

A : $80 million

B : $40 million

C : $48 million

D : $24 million

Answer: D

Question 4

H Company has a fixed rate load at 10.0%, but wishes to swap to variable. It can borrow at LIBOR 8%.

The bank is currently quoting swap rates of 3.1% (bid) and 3.5% (ask).

What net rate will H Company pay if it enters into the swap?

A : BOR +6.5%

B : BOR +8%

C : BOR +6.9%

D : BOR +3.1%

Answer: C

Question 5

Which THREE of the following would be most important if a hospital wishes to review the effectiveness of its services?

A : proportion of surgical procedures that are deemed to be successful.

B : erage waiting times for treatment.

C : tient satisfaction ratings.

D : aff costs compared to previous years.

E : venue generated from car park charges.

Answer: A,B,C

Page: 1 / 61

Total 305 Questions | Updated On: Jul 29, 2025

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