CIMAPRA19-F03-1 Exam - Topic 5 Question 48 Discussion

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

Question #: 48
Topic #: 5

CompanyA is located in Country A, where the currency is the A$.

It is listed on the local stock market which was set up 10 years ago.

It plans a takeover of Company B, which is located in CountryB where the currency is the B$, and where the stock market has been operating for over 100 years.

CompanyA is considering how to finance the acquisition, and how the shareholders of CompanyB might respond to a share exchange or cash (paid in B$).

Which of the followingislikely to explain why the shareholders ofCompanyB wouldprefera share exchange as opposed to a cash offer?

AIt would allow them to realise their investment and make a capital gain.

BIt would avoid them being exposed to foreign currency risk.

CThey would receive shares in a market that is likely to be more efficient.

DIt would enable them to benefit from the future performance of the combined entity.

Show Suggested Answer

Suggested Answer: D

by Lisha at May 09, 2022, 01:08 AM

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Jessenia

4 months ago

Surprised they’d prefer shares! Isn’t cash more straightforward?

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Kristine

4 months ago

Capital gains sound nice, but what about volatility?

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Natalie

4 months ago

Really? I thought cash was always better.

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Vivienne

4 months ago

Definitely prefer shares over cash in this case.

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Janessa

5 months ago

Share exchange helps avoid currency risk!

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Haydee

5 months ago

This looks like a straightforward question on security standards and implementation specifications. I'll review the options carefully and try to recall the key elements of the standard.

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Elke

5 months ago

Okay, I've got this. When creating a decision operation, you can select a ruleflow, which is the correct answer. The other options don't seem relevant to that specific task.

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Camellia

5 months ago

Hmm, I'm not sure about this one. I'll need to think it through carefully. Maybe I should eliminate the options that don't seem to fit the description.

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Pearline

5 months ago

I'm pretty confident about this one. Using map fragments is definitely the way to go for adding Google Maps to an Android app.

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