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CIMA Exam CIMAPRA19-F03-1 Topic 6 Question 91 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 91
Topic #: 6
[All CIMAPRA19-F03-1 Questions]

Company HJK is planning to bid for listed company BNM

Financial data for BNM for the financial year ended 31 December 20X1:

HJK is not forecasting any growth in these figures for the foreseeable future

Profit and cost data above should be assumed to be equivalent to cash flow data when answenng this question

Which THREE of the following approaches would be most appropriate for HJK to use to value the equity of BNM?

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Suggested Answer: A, B, C

by Celeste at Jul 08, 2024, 09:30 PM

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Kate
7 days ago
But option E takes into account the tax and the value of debt, which is important for accurate valuation.
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Elenore
7 days ago
Option E seems the most appropriate approach, as it considers the net cash flows after tax and discounts them at the weighted average cost of capital (WACC) minus the value of debt. This gives a more comprehensive valuation of the equity.
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Carol
11 days ago
I disagree, I believe option A is the best choice.
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Kate
15 days ago
I think option E is the most appropriate approach.
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