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: Dec 17, 2025

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Question 1

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 2

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 3

An analyst has valued a company using the free cash flow valuation model.

The analyst used the following data in determining the value:

• Estimated free cashflow in 1 year's time = $100,000

• Estimated growth in free cashflow after the first year = 5?ch year indefinitely

• Appropriate cost of equity = 10%

The result produced by the analyst was as follows:

Value of equity = $100,000 (1+0.05)/0.10 = $1,050,000

The analyst made a number of errors in determining the value.

By how much has the analyst undervalued the company?

A : $950,000

B : $2,000,000

C : $2,100,000

D : $1,050,000

Answer: A

Question 4

A company needs to raise $20 million to finance a project.

It has decided on a rights issue at a discount of 20% to its current market share price.

There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per share.

Calculate the terms of the rights issue.

A : 1 new share for every 4 existing shares

B : 1 new share for every 20 existing shares

C : 1 new share for every 5 existing shares

D : 1 new share for every 25 existing shares

Answer: A

Question 5

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 : ntrol premium not being included within the proxy p/e ratio used.

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

Page: 1 / 61

Total 305 Questions | Updated On: Dec 17, 2025

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