CIMA Exam CIMAPRA19-F03-1 Topic 2 Question 63 Discussion

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

Question #: 63
Topic #: 2

NNN is a company financed by both equity and debt. The directors of NNN wish to calculate a valuation of the company's equity and at a recent board meeting discussed various methods of business valuation.

Which THREE of the following are appropriate methods for the directors of NNN to use in this instance?

ATotal earnings multiplied by a suitable price-earnings ratio.

BCash flow to all investors discounted at WACC less the value of debt.

CCash flow to all investors discounted at WACC.

DCash flow to equity discounted at the cost of equity less the value of debt.

ECash flow to equity discounted at the cost of equity.

Show Suggested Answer

Suggested Answer: A, B, E

by Chantell at Jan 06, 2023, 10:19 PM

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