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F3 Financial Strategy Questions 153–160 (page: 21)

Which THREE of the following long term changes are most likely to increase the credit rating of a company?

A manufacturing company is based in Country L whose currency is the L$. One of the company's products is exported to Country M, a rapidly growing economy, whose currency is the M$. In the most recent financial year:   
* 100,000 units of the product were sold to customers in country M   
* The unit selling price was M$12 The spot rate today is L$1 = M$5  The company has an objective of growth in total sales value in L$ of 10% a year. 
If the L$ strengthens by 5% next year against the M$, what volume of sales of this product is needed next year to achieve the objective?

A company is preparing an integrated report according to the International <IR> Framework as issued by the International Integrated Reporting Council.
Which THREE of the following should be included in the report?

A national airline has made an offer to acquire a smaller airline in the same country.
Which of the following would be of most concern to the competition authorities?

A company financed by equity and debt can be valued by discounting:

A company proposes to value itself based on the net present value of estimated future cash flows.
Relevant data:   
* The cash flow for the next three years is expected to be £100 million each year   
* The cash flow after year 3 will grow at 2% to perpetuity   
* The cost of capital is 12%
The value of the company to the nearest $ million is:

A company is financed as follows:   
* 400 million $1 shares quoted at $3.00 each.   
* $800 million 5% bonds quoted at par. The company plans to raise $200 million long term debt to finance a project with a net present value of $100 million. The bank that is providing the debt is insisting on a maximum gearing level covenant.   Gearing will be based on market values and calculated as debt/(debt + equity).
What is the lowest figure for the gearing covenant that the bank could impose without the company breaching the agreement?

Which THREE of the following would be most important if a hospital wishes to review the effectiveness of its services?