Prepare for the CIMA F3 Financial Strategy exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.
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A company has announced a rights issue of 1 new share for every 4 existing shares.
Relevant data:
* Thecurrentmarketprice per shareis $10.00.
* Rights areto beissued at a 20% discount to the current price.
* The rate of return on the new funds raisedis expected tobe 10%.
* Therate of return on existing funds is5%.
What is the yield-adjustedtheoreticalex-rightsprice?
Give your answer totwodecimal places.
$?
A company generates and distributes electricity and gas to households and businesses.
Forecast results for the next financial year are as follows:
The Industry Regulator has announced a new price cap of $1.50 per Kilowatt.
The company expects this to cause consumption to rise by 10% but costs would remained unaltered.
The price cap is expected to cause the company's net profit to fall to:
Listed company R is in the process of making a cash offer for the equity of unlisted company S.
Company R has a market capitalisation of $200 million and a price/earnings ratio of 10.
Company S has a market capitalisation of $50 million and earnings of $7 million.
Company R intends to offer $60 million and expects to be able to realise synergistic benefits of $20 million by combining the two businesses. This estimate excludes the estimated $8 million cost of integrating the two businesses.
Which of the following figures need to be used when calculating thevalue of the combined entity in $ millions?
Calculation_F0
Calc_Set1
Company AEE has a 10 year 6% corporate bond in issue which has a nominal value of $400 million, which is currently trading at 95%. The bond is secured on the company's property
The Board of Directors has calculated the equity value of Company AEE as follows;
Which THREE of the following are errors in the valuation?
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