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Free CIMA CIMAPRO19-F03-1-ENG Exam Questions

Absolute Free CIMAPRO19-F03-1-ENG Exam Practice for Comprehensive Preparation 

  • CIMA CIMAPRO19-F03-1-ENG Exam Questions
  • Provided By: CIMA
  • Exam: F3 Financial Strategy
  • Certification: CIMA Professional Qualification
  • Total Questions: 305
  • Updated On: Jan 12, 2026
  • Rated: 4.9 |
  • Online Users: 610
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  • Question 1
    • Company Y plans to diversify into an activity where Company X has an equity beta of 1.6, a debt beta of zero
      and gearing of 50% (debt/debt plus equity).
      The risk-free rate of return is 5% and the market portfolio is expected to return 10%.
      The rate of corporate income tax is 30%.
      What would be the risk-adjusted cost of equity if Company Y has 60% equity and 40?bt?

      Answer: B
  • Question 2
    • The Board of Directors of a listed company is considering the company's dividend/retentions policy.
      The inflation rate in the economy is currently high and is expected to remain so for the foreseeable future.
      The board are unsure what impact the high level of inflation might have on the dividend policy.
      Which THREE of the following statements are true?

      Answer: B,C,D
  • Question 3
    • A listed company in a high growth industry, where innovation is a key driver of success has always operated a
      residual dividend policy, resulting in volatility in dividends due to periodic significant investments in research
      and development.
      The company has recently come under pressure from some investors to change its dividend policy so that
      shareholders receive a consistent growing dividend. In addition, they suggested that the company should use
      more debt finance.
      If the suggested change is made to the financial policies, which THREE of the following statements are true?

      Answer: A,B
  • Question 4
    • A company has 6 million shares in issue. Each share has a market value of $4.00.
      $9 million is to be raised using a rights issue.
      Two directors disagree on the discount to be offered when the new shares are issued.
       • Director A proposes a discount of 25%
       • Director B proposes a discount of 30%
      Which THREE of the following statements are most likely to be correct?

      Answer: B,C,D
  • Question 5
    • A listed company is financed by debt and equity.
      If it increases the proportion of debt in its capital structure it would be in danger of breaching a debt covenant
      imposed by one of its lenders.
      The following data is relevant:


      29

      The company now requires $800 million additional funding for a major expansion programme.
      Which of the following is the most appropriate as a source of finance for this expansion programme?

      Answer: C
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