CIMAPRA19-F03-1 Exam - Topic 2 Question 35 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 35
Topic #: 2

On1 January:

* Company X has a value of $50 million

* Company Y has a value of $20 million

* Both companies arewhollyequity financed

Company X plans to take over Company Y by means of a share exchange. Following the acquisition the post-tax cashflow of Company Xfor the foreseeable futureis estimated to be $8 millioneach year. The post-acquisition cost of equity is expected to be 10%.

What is the best estimate of thevalue of the synergy that would arise from the acquisition?

A$10 million

B$30 million

C$60 million

D$100 million

Show Suggested Answer

Suggested Answer: A

by Merlyn at May 06, 2022, 03:41 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Merissa

5 months ago

Wait, how do they even calculate synergy value? Sounds complicated!

upvoted 0 times

...

Darci

5 months ago

With $8 million cash flow and 10% cost of equity, I’d say $60 million makes sense.

upvoted 0 times

...

German

5 months ago

$100 million? That seems way too high for synergy!

upvoted 0 times

...

Cecilia

5 months ago

I think the synergy value is definitely more than $30 million.

upvoted 0 times

...

Cassi

5 months ago

Company X is valued at $50 million, while Company Y is at $20 million.

upvoted 0 times

...

Mariann

6 months ago

I'm a bit confused here. The question says User1 is the owner of Group1, so wouldn't they be the one who can perform the access reviews for User3?

upvoted 0 times

...

Audry

6 months ago

Hmm, I'm a bit unsure about the steps here. I think I need to drag the "Title ID" field to the Filters area, but I'm not sure what to do after that. I'll have to read through the instructions carefully.

upvoted 0 times

...

Reynalda

6 months ago

I'm a bit confused by this question. The options don't seem to be clearly differentiated, and I'm not sure how they relate to requirements approval. I'll need to carefully read through the explanations for each approach to try to identify the best match.

upvoted 0 times

...

Millie

6 months ago

I'm pretty confident about this one. The grub-install command is used to install the GRUB boot loader on a specific device, which in this case is /dev/sda. Option C clearly describes that, so I'll select that as my answer.

upvoted 0 times

...