Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

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

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?
D) It would enable them to benefit from the future performance of the combined entity.
A) It would allow them to realise their investment and make a capital gain.
B) It would avoid them being exposed to foreign currency risk.
C) They would receive shares in a market that is likely to be more efficient.

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

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 48
Topic #: 5
[All CIMAPRA19-F03-1 Questions]

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?

Show Suggested Answer Hide Answer
Suggested Answer: D

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

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Jessenia
7 months ago
Surprised they’d prefer shares! Isn’t cash more straightforward?
upvoted 0 times
...
Kristine
7 months ago
Capital gains sound nice, but what about volatility?
upvoted 0 times
...
Natalie
8 months ago
Really? I thought cash was always better.
upvoted 0 times
...
Vivienne
8 months ago
Definitely prefer shares over cash in this case.
upvoted 0 times
...
Janessa
8 months ago
Share exchange helps avoid currency risk!
upvoted 0 times
...
Haydee
8 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.
upvoted 0 times
...
Elke
8 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.
upvoted 0 times
...
Camellia
8 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.
upvoted 0 times
...
Pearline
8 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.
upvoted 0 times
...

Save Cancel