Cima F3 Exam Question No 7

Question No 7:

Company T is a listed company in the retail sector. Its current profit before interest and taxation is $5 million. This level of profit is forecast to be maintainable in future. Company T has a 10% corporate bond in issue with a nominal value of $10 million. This currently trades at 90% of its nominal value.
Corporate tax is paid at 20%. The following information is available: Which of the following is a reasonable expectation of the equity value in the event of an attempted takeover?

A. $32.0 million
B. $41.6 million
C. $65.0 million
D. $50.2 million

Answer: B

Cima F3 Exam Question No 6

Question No 6:

A company has in a 5% corporate bond in issue on which there are two loan covenants.
• Interest cover must not fall below 3 times
• Retained earnings for the year must not fall below $3.5 million
The Company has 200 million shares in issue.
The most recent dividend per share was $0.04.
The Company intends increasing dividends by 10% next year.
Financial projections for next year are as follows:
Advise the Board of Directors which of the following will be the status of compliance with the loan covenants next year?

A. The company will be in compliance with both covenants.
B. The company will be in breach of both covenants.
C. The company will breach the covenant in respect of retained earnings only.
D. The company will be in breach of the covenant in respect of interest cover only.

Answer: C

Cima F3 Exam Question No 5

Question No 5:

A listed company plans to raise $350 million to finance a major expansion program. The cash flow projections for the program are subject to considerable variability. Brief details of the program have been public knowledge for a few weeks. The directors are considering two financing options, either a rights issue at a 20% discount to current share price or a long term bond. The following data is relevant: The company's share price has fallen by 5% over the past 3 months compared with a fall in the market of 3% over the same period. The directors favor the bond option.
However, the Chief Accountant has provided arguments for a rights issue. Which TWO of the following arguments in favor of a right issue are correct?

A. The issue of bonds might limit the availability of debt finance in the future.
B. The recent fall in the share price makes a rights issue more attractive to the company.
C. The rights issue will lead to less pressure on the operating cash flows of the program.
D. The WACC will decrease assuming Modigliani and Miller's Theory of Capital Structure without taxes applies.
E. The administrative costs of a rights issue will be lower.

Answer: A, C

Cima F3 Exam Question No 4

Question No 4:

Two listed companies in the same industry are joining together through a merger.
What are the likely outcomes that will occur after the merger has happened?
Select ALL that apply.

A. Increase in customer base.
B. Competition authorities step in to stop a potential price monopoly.
C. Decrease in employee motivation due to internal changes.
D. Changes to supplier relationships owing to internal changes.
E. Cost savings from synergistic benefits and economies of scale.

Answer: A, C, D, E

Cima F3 Exam Question No 3

Question No 3:

Company A is a large listed company, with a wide range of both institutional and private shareholders.

It is planning a takeover offer for Company B.

Company A has relatively low cash reserves and its gearing ratio of 40% is higher than most similar companies in its industry.

Which TWO of the following would be the most feasible ways of Company A structuring an offer for Company B?

A. Cash offer, funded by borrowings.
B. Share for share exchange.
C. Cash offer, funded from existing cash resources.
D. Cash offer, funded by a rights issue.
E. Debt for share exchange.

Answer: B, D

Cima F3 Exam Question No 2

Question No 2:

Company E is a listed company. Its directors are valuing a smaller listed company, Company F, as a possible acquisition.
The two companies operate in the same markets and have the same business risk.
Relevant data on the two companies is as follows:
Both companies are wholly equity financed and both pay corporate tax at 30%.
The directors of Company E believe they can "bootstrap" Company F's earnings to improve performance.
Calculate the maximum price that Company E should offer to Company F's shareholders to acquire the company.
Give your answer to the nearest $million.

A. 3,150
B. 1,890
C. 4,500
D. 2,700

Answer: A

What happened this far at CIMA Launch Pad 2015: Quick Recap

Throughout the month we brought you the events and ideas of CIMA Launch Pad 2015. The final will be tomorrow, Sunday November 1 the final destination of this trip. Here's a quick summary of what happened on the trip so far and what will happen.

Pace Location

 The pace was not a land of 3 minutes for the competing teams competing in two categories; Business and social. Of the 10 ideas ideas that were presented in each category were selected to move to the next phase.

The teams were invited to submit a detailed proposal of his idea, which ideally should include information on the concept, the details of the investigation (facts and figures) and over the entire business model.

Mentoring Program

After the presentation of the proposal, teams were sent through a tutoring session that had two phases; general workshop and mentoring. The key segment was the tutoring session where each team had the opportunity to have one to one discussions with the business idea with mentors.

Press conference

Company CIMA students organized a press conference with the intention of spreading the word of the good things that are happening. The representatives at the head table were Mrs. Akbar Amrah CFO Mr. Gnanam Jeevan Innovations MAS - Chairman / CEO of Orion City, Dr. Thulci Aluwihare, Director of Mergers and Acquisitions PwC, Mr. Vipula Gunatilleka President of CIMA Sri Council Lanka, Ms. Hasanji Ellawala company president and President Abdul Baasit Project CIMA students, CIMA Launch Pad 2015.

Four teams: Business Category 

CIMA Launch Pad finalists 2015 in the category of business (only) was revealed in the press conference. They were selected by the committee on the basis of advice from SLASSCOM evaluation of your project proposal. Congratulations to Alfa, Body Sculpt and Homefoods.lk TrekThru team. Remember, the positions are still to be determined and will happen in the Grand Final.

However, the top four teams of the social category are not announced so far and that was because they had another lap to go through unlike competitors in the business category.

Finals: Social Category

As we said, another round just to the social phase. It was not five minutes, followed by a 15 minute Q & A session. Had Ms. Sharmini Ratwatte, non-executive director for more investment and John Keells PLC, Dr. Rizvan Jaldeen, CEO - Business Development and Services Center LLC, Mr. Ravindu Denawaka General Olanka Travel, M. Abdul Careem Consultant CEO / Business - International Inotrend and Mr. Charitha Ratwatte, Jr., Director - Sustainable Development Axiata Group PLC dialogue on the panel of judges.

Although 10 teams had the opportunity to compete for any rate, which was reduced to 7 teams in the presentation of the proposal and the mentoring program. Unfortunately, it was 6 teams that could make presentations. Light equipment, boomers, Army of Poseidon, the team Tripper innovation labs and knowledge presented their ideas.

Of the 6 teams, 4 teams; the same as in the corporate category was chosen by the jury. Boomers, the Tripper equipment, soaps and innovation laboratories have qualified for the final.

 It would be nice if we say it was an intense time. Judges at all team mascot. Certainly if you happen to be a competitor and you hear these criticisms in his idea that you think so, you may be injured.
But the fact is, it would probably be the bitter truth that your mind does not want you agree because you are too blinded by love for his son brain. What is natural. In other words, these points could be real traps in the concept.
At the same time, remember, the idea is not bad, nobody can say it's okay. He would need some changes and improvements. Or this little feature in your great idea might be in itself the company is looking for all this time. As a future entrepreneur, listening is something you have to do more than talk. Hear.

What's Next?

Grand Final, the following eight categories representing the two teams presented their idea for the last time. Why? Because investors have in the house. This is best suited for teams to show that their idea is worthy of being the winner of the CIMA Launch Pad 2015. Even if you do not win, they got so far showing that they are all winners with great ideas now.

Cima F3 Exam Question No 1

Question No 1:

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. The relative lack of marketability of unlisted company shares.
B. A lower level of scrutiny and regulation for unlisted companies.
C. Unlisted companies being generally smaller and less established.
D. Control premium not being included within the proxy p/e ratio used.
E. The forecast earnings growth being relatively higher in the unlisted company.
F. A profit item within the unlisted company's latest earnings which will not reoccur.

Answer: A, B, C

CELEBRATING BRAC AND CIMA

CELEBRATING BRAC AND CIMA:

A reception was organized by CIMA at the residence of British High Commissioner on May 27 in celebration of the Memorandum of Understanding signed between CIMA and BRAC Business School during last December. According to the MoU, ICMA BRAC Business School awarded 8 exemptions paper products in 2015 17 students CIMA Accounting Major Program.

The program included the participation of all faculty members BRAC Business School, Honorable Vice Chancellor of BRAC University, Emeritus Professor Hafiz G Siddique, CIMA Regional Director Bradley Emerson, His Excellency Robert Gibson, Deputy High Commissioner Mark Clayton, CIMA and Country Manager zareef Tamanna morning. The guest of honor at the ceremony was Sir Fazle Hasan Abed, founder of BRAC president.


Sir Abed had completed his degree in thirty CIMA UK and has been associate member of the Institute.The program of celebration CIMA Bangladesh Sir Abed recognized for his long affiliation with the Chartered Institute of Management Accountants. Deputy High Commissioner Mark Clayton Ridge, gave Sir Abed. CIMA Bangladesh is honored to have Sir Abed in faternity CIMA.

In his valuable intervention, Sir Abed shared, "In the 50s and 60s of last century, was negligent in maintaining my membership of the institution and has lost all contact with him. Although my career later took a completely different path, I must say that what I learned from the study of the first naval architecture and cost accounting as my actions to the foundation and construction of the largest non-governmental organization in the world -.

 As BRAC founder and chairman of the board of the BRAC University, I have the pleasure of being connected with this valuable institution. "Speaking at the event, Deputy High Commissioner Mark Clayton said: "The degrees offered by the professional bodies in the UK are the standard by which others are measured This partnership between CIMA and BRAC Business School is an excellent initiative. and another important development in the broader partnership between the UK and Bangladesh in education and skills ".

CIMA Global Business Challenge 2015 Shortlist Announced:

 CIMA Global Business Challenge 2015 shortlist announced:


CIMA, the Chartered Institute of Management Accountants, announced today the list for GCC CIMA Global Business Challenge 2015. The competition on the world market is an annual event organized in partnership with Barclays. The stage of the GCC competition is supported by the Ministry of Finance - Government of Dubai, Emirates Aluminium Global, Unilever and BMMI.


Six teams were selected for the next stage of the competition. The finalists represent Heriot Watt University and the University of Middlesex, United Arab Emirates and the Sultan Qaboos University, Oman. The teams will now compete in the regional finals June 14, 2015, and the winner will represent his country at the World Finals in Warsaw, Poland, in August 2015.The CIMA Global Business Challenge is a business competition for students worldwide to improve business management skills and identify young entrepreneurs of the future. It encourages teams competing to put their business skills to the test by analyzing and solving real business case.Andrew Harding,

President of CIMA, said:

 "On behalf of CIMA, congratulate the teams shortlisted for his outstanding achievement in the first stage of the Global Business Challenge 2015. These students are a good example of the young talent we have helped to identify and support through competition. We are pleased that gives them a unique opportunity to discover the world of business and opportunity to strengthen their skills. We wish the competitors the best of luck in the regional final and we hope to welcome the winning team in the prestigious world finals. "Commenting on the competing teams, Geetu Ahuja, Head of GCC CIMA, said:

"We are surprised to see how exceptional quality of submissions over the years, we have witnessed increasing measurement and quality that is truly inspiring entries.. We hope that new ideas and campaigns teams finalists are brought to the table during the regional finals and wish them all the best. "

CIMA signed Memorandum of Understanding

CIMA signed Memorandum of Understanding with Chulalongkorn University, Assumption University College of Business and Tourism Finn and deliver CIMA qualification in ThailandBANGKOK, May 18, 2015 / PRNewswire / -


College students pursuing an accounting degree from Chulalongkorn University and the University of the Assumption now be able to obtain a professional qualification in management accounting in a much shorter. 


This fast track route is provided under a Memorandum of Understanding (MOU) signed between the two universities and the Chartered Institute of Management Accountants (CIMA) May 6, 2015.Under the agreement, these students pass the CIMA exam during their senior year in college.


 Following this review, which they will graduate with two degrees - a bachelor's degree in accounting and CIMA advanced diploma or diploma in management accounting which are recognized by employers worldwide. Then you can complete the full CIMA qualification after graduation can be done on a part time basis if they decide to enter the labor market after graduation.After completing the CIMA qualification and gain three years of relevant work experience, they become members of the CIMA and Global Management

 Accountants (CGMA). 


CGMA is a global professional designation conferred by CIMA and the American Institute of Certified Public Accountants (AICPA).Students in Thailand who wish to pursue the CIMA qualification can now study at Finn School of Business and Tourism. 


The university is the first CIMA tuition provider in Thailand under a memorandum of understanding signed on 7 May 2015. Finn College prepare students for the examinations of the CIMA.

CIMA Global President for 2014/15

CIMA Global President for 2014/15:

CIMA Global President for 2014/15

CIMA Global President for 2014/15

CIMA Global President for 2014/15, Keith fate has made a courtesy call to the British High Commissioner in Sri Lanka James Dauris, while on an official visit to the country. Vipula Gunatilleka, president of CIMA Sri Lanka and Bradley Emerson, Regional Director of CIMA, Middle East, South Asia and North Africa were also present. Here Keith luck and Sri Lanka High Commissioner James Dauris meeting

CIMA Boss Commends Sponsorship of ACOA 2015

CIMA Boss Commends Sponsorship of ACOA 2015:

Regional Director for Africa by the Chartered Institute of Management Accountants (CIMA), Samantha Louis, hailed the designation of Certified Management Accountant World (CGMA) Gold sponsorship of the Pan Africanist Congress of Accountants (ACOA) 2015 to be held in Mauritius from 12 to 14 May 2015.

The CGMA is an integral designation formed through a joint venture CIMA and the American Institute of Certified Public Accountants (AICPA).

According to Louis, CIMA is "very happy CGMA ACOA sponsorship Oro 2015 offers us a unique opportunity to present this global accounting designation across the continent and the international business community.

"Since 2012 CIMA has changed the rules for counting first with the launch of the CGMA designation and now with the launch of the global management accounting policies that promote strong during the conference ACOA 2015," Louis said.

Jointly developed by CIMA and the AICPA, the principles are the first of a kind of blueprint and guidelines for practitioners to improve decision-making. They were developed based on extensive research with the leaders of 35 countries, it revealed that organizations worldwide are struggling with data overload, dispersed workforce and the awesome speed of change.

The four principles focus on decompartmentalise through a communication of influence, the area of ​​the most relevant and reliable information data for review; analysis reveals the impact on the value of the organization and conduct to promote integrity and trust that protects the long-term sustainability.

Luis added "BELIEVE the widespread adoption of the Principles is ensure that organizations have leadership Strengthen and Improve the function comptabilité Inside management of their organizations, which is so important to paragraph CIMA CGMA enters the Opinion Leaders CASLPA has attended 2015. "

  CIMA founded in 1919, it is the world leader Major Accounting Organization and management professional with more than 227,000 students and members in 179 countries working within the company. CIMA members and students work in industry, commerce, the public sector and Nonprofit Organizations.

CIMA and The Hackett Group to Collaborate On Professional Development Offering For Global Business Services & Shared Services Organizations

CIMA and The Hackett Group to Collaborate On Professional Development Offering For Global Business Services & Shared Services Organizations:

 MIAMI AND LONDON April 20, 2015 (BUSINESS WIRE) - CIMA, the Chartered Institute of Management Accountants and The Hackett Group, Inc. HCKT, -0.60% announced a strategic partnership to market the first comprehensive and professional talent management program skills development adapted to global business services (GBS) and professional shared services.

Working together, The Hackett Group and CIMA try to answer the obvious need for GBS and shared services organizations invest in programs to recruit, develop and retain staff in order to develop professional skills and knowledge to achieve and maintain standards of -Class world performance.

For companies with more than $ 1 billion in revenue, The Hackett Group estimates that organizations of more than 10,000 prisoners of EGB currently operating worldwide with subcontractors business processes operating over 2,000 centers. In total BPO organizations, captives and employ almost 5 million professionals. These estimates are based on an analysis of the results of benchmarking and performance studies EGB The Hackett Group, in combination with public data. The Hackett Group also believes that in the last 10 years, the number of business processes that are field GBS Service Portfolio increased approximately 20% to 60% of all business processes business support. However, for most part programs, training and development still turn to traditional functional organizations and have not adapted to the dramatic transformation services delivery model held.

The existing certificate Hackett Group and launching CIMA CIMA qualification in shared services such as co-branded Global Business Services. The rating will provide a level of training that can be applied consistently across all markets, establishing measurable basic global standards. Rated incorporates empirical data, ideas and other intellectual property own financing, purchasing, information technology, human resources, and other key service areas of the company, from the comparative analysis in depth of The Hackett Group, Executive Board and practices preparation. Furthermore, based on the experience of CIMA, the world's largest professional organization of Management Accountants, with more than 227,000 members in 179 countries.
Ted Fernandez, president and CEO of The Hackett Group, said :. "We are excited to leverage our intellectual property GBS to help build and support professional development programs for world class professionals GBS The rapid transition and continuing education of traditional functional roles centers EGB has created a significant demand for offerings created through our collaboration. "


Charles Tilly, CMA, CGMA, CEO, CIMA, said: "CIMA has been at the forefront of professional development for EGB and shared services industry, having launched the first certificate in shared services in the world in October 2014 . on the basis of our current success, we are proud to be the next step by partnering with the Hackett Group. Together we will enable organizations to maintain and develop the skills and knowledge they need, while helping people make charge of your career. "