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CIMAPRA19-F03-1 Exam - Topic 6 Question 29 Discussion

CompanyA has made an offer to acquire CompanyZ.Both companies are quoted and their current market share prices are:* CompanyA- $4* CompanyZ- $5Shareholders in companyZhave been given three alternative offers:* Cash of $5.50 per share* Shareforshareexchangeonthebasisof3for2* 10.5% longdatedbondforevery20sharesThe bond is has a nominal value of $100 and the expected yield on bonds of similar risk is 10%.You are advising a CompanyZshareholder on the three offers.She requires a 15% premium if she is to accept the offer.In providing your advice, whichof the following statements is correct?
C) The share for share exchange is the only offer which is above the acceptance threshold.
A) The bond offer is only worth $100 which represents a zero premium and should be rejected.
B) The bond offer is above the minimum threshold and should be accepted.
D) The value of the consideration given by the cash and bond offers is certain, unlike the share offer.

CIMAPRA19-F03-1 Exam - Topic 6 Question 29 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 29
Topic #: 6
[All CIMAPRA19-F03-1 Questions]

CompanyA has made an offer to acquire CompanyZ.

Both companies are quoted and their current market share prices are:

* CompanyA- $4

* CompanyZ- $5

Shareholders in companyZhave been given three alternative offers:

* Cash of $5.50 per share

* Shareforshareexchangeonthebasisof3for2

* 10.5% longdatedbondforevery20shares

The bond is has a nominal value of $100 and the expected yield on bonds of similar risk is 10%.

You are advising a CompanyZshareholder on the three offers.

She requires a 15% premium if she is to accept the offer.

In providing your advice, whichof the following statements is correct?

Show Suggested Answer Hide Answer
Suggested Answer: C

by Alex at May 06, 2022, 03:06 PM

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Geraldo
9 months ago
Share for share exchange sounds complicated, not sure about that one.
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Sunshine
9 months ago
Totally agree, the cash offer is the best choice here!
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Charisse
9 months ago
Wait, the bond is only worth $100? That sounds off.
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Jodi
9 months ago
I think the bond offer is risky, not worth it.
upvoted 0 times
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Terrilyn
9 months ago
Cash offer is $5.50, that's a solid premium!
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Judy
10 months ago
I think the key here is to focus on how Marketing Cloud Connect can be used to trigger the sends when new contacts are created for the key accounts. The options mention different Salesforce objects, so I'll need to think through which one makes the most sense.
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Penney
10 months ago
I'm feeling pretty good about this one. The key is understanding that you need to provide the username and password of the user you're impersonating in order to invoke the service on their behalf. The "activiti-user" and "activiti-user-password" headers are the obvious choices here.
upvoted 0 times
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Beckie
10 months ago
I'm a bit confused by the options here. I don't recognize some of these file system types, so I'll need to do a quick review of the course material to jog my memory.
upvoted 0 times
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Lawana
10 months ago
This question seems straightforward, but I want to make sure I understand the key differences between marginal and absorption costing for pricing decisions.
upvoted 0 times
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