An unlisted company.

CIMA F3 Question Answer

• Is owned by the original founders and members of their families

• Pays annual dividends each year depending on the cash requirements of the dominant shareholders.

• Has earnings that are highly sensitive to underlying economic conditions.

• Is a small business in a large Industry where there are listed companies with comparable capital structures

Which of the following methods is likely to give the most accurate equity value for this unlisted company?

Dividend valuation model.

Net asset valuation

P/E based valuation using the P/E of a similar company.

Discounted cash flow analysis at WACC (based on cash flows after tax but before financing) plus the market value of debt.

CIMA F3 Summary

Price: $52.5 ~~$149.99~~