Pre-Winter Special Limited Time 70% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: validbest

Discussions
  1. Home
  2. Discussions
  3. CIMA
  4. CIMA Strategic
  5. F3 Discussions
  6. F3 Exam Topic 13 Question 123 Discussion
 CIMA Discussions
Exam F3 All Questions
Exam F3 All Questions

View all questions & answers for the F3 exam

Go to Exam

CIMA Strategic F3 Question # 123 Topic 13 Discussion

F3 Exam Topic 13 Question 123 Discussion:
Question #: 123
Topic #: 13

Company A has agreed to buy all the share capital of Company B.

The Board of Directors of Company A believes that the post-acquisition value of the expanded business can be computed using the "boot-strapping" concept.

Which of the following most accurately describes "boot-strapping" in this context?
A.

Forecasting the future free cash flows of the combined entities and discounting these at the bidder's Weighted Average Cost of Capital

B.

Adding together the current post tax earnings of each company and multiplying this by the price earnings ratio of the acquired entity

C.

Adding together the current post-tax earnings of each company and multiplying this by the price/earnings ratio of the bidder

D.

Combining the pre-acquisition market capitalisation of each company

Get Premium F3 Questions
Actual exam question for CIMA F3 exam by Zephyr7467 at Sep 9, 2026, 12:00:15 AM

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.

Submit