CIMA Exam CIMAPRA19-F03-1 Topic 7 Question 45 Discussion

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

Question #: 45
Topic #: 7

Company P is a largeunlisted food-processing company.

Its currentprofitbefore interest and taxationis$4 million, which it expects to be maintainablein the future.

It has a $10 million long-termloan on which it pays interest of 10%.

Corporate tax ispaid at the rate of 20%.

The following information on P/E multiples is available:

Which of the following is the best indication of theequityvalue of Company P?

A$80 million

B$40 million

C$48 million

D$24 million

Show Suggested Answer

Suggested Answer: D

by Denise at May 09, 2022, 07:49 AM

Limited Time Offer

25%

Off

Contribute your Thoughts:

Submit Cancel

Currently there are no comments in this discussion, be the first to comment!