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CIMA Exam CIMAPRA19-F03-1 Topic 6 Question 87 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 87
Topic #: 6
[All CIMAPRA19-F03-1 Questions]

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?

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Suggested Answer: A, B, E

Contribute your Thoughts:

1 days ago
Hmm, I'm not sure about option D. Discounting the cash flow to equity at the cost of equity AND subtracting the debt value? Seems like overkill to me.
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4 days ago
I agree with Ciara. B and C are the way to go. Gotta love that WACC discount!
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13 days ago
Option B and C seem like the most appropriate methods for valuing the company's equity. Discounting the cash flow to all investors at WACC is a solid approach.
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