Page 410 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Subject F3: Financial Strategy

39 Which THREE of the following are the general objectives of competition
authorities?

A To strengthen competition

B To consider the public interest

C To prevent or reduce anti-competitive activities

D To generate an operating surplus

E To eliminate competitive advantage

40 Extracts from the most recent accounts of an unlisted company Josephine Co
are shown below:

$000
Operating profit 756.5
Financing costs (124.7)
––––––

631.8
Taxation (130.6)
––––––

501.2
––––––
Josephine Co has 2 million shares in issue.

The overall average price-earnings ratio for listed companies is 11, and the
average for listed companies in the same business sector as Josephine Co is 8.

Which of the following is the best estimate of the share price of Josephine
Co (to the nearest two decimal places)?

A $3.03

B $2.76

C $2.53

D $2.00

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