• The Miller-Orr model and Baumol model.
• Debt factoring and settlement discounts.
• SME finance (for more detail refer to the Student Accountant article
‘Business finance and the SME sector’ – September 2001).
• Purchasing power parity and interest rate parity theories.
• Working capital – questions on inventory management and receivables management are likely
• Investment decisions – net present value (NPV), often with tax and inflation. You may need to calculate a weighted average cost of capital before you calculate an NPV.
• Sources of finance – a topical area, we would expect a part
question on financing problems covering gearing issues and problems for small and medium sized
companies. Ratio analysis is likely to feature here.
• Business valuations commonly tested and a core syllabus area. In recent sittings the examiner has looked to combine different syllabus areas within the same exam question; for example, asking you to calculate a cost of equity and then use it to value a company. Make sure that you are also able to value debt.
• Financial environment & risk management – recent exchange rate and interest rate volatility could impact on a company’s financial management plans – a part question on this area could be set, with further discussion and calculations on hedging techniques.
• Investment appraisal – risk and uncertainty.
• Working capital management – models for inventory and cash management.
• Valuations – asset and cash flow based values.
• Business finance – gearing/capital structure calculations/commentary.
• Risk management – interest rate risk.
• Investment appraisal – tax and inflation.
• Cost of capital – project specific discount rates.
• Business finance – rights issue and gearing.
• Risk – parity theory and currency hedging.
• WCM – financing of WC and receivables.
• Valuation – PV of FCF.
• NPV – sensitivity analysis.
Doesn’t that pretty much cover the entire course?
Yes it does.. the whole F9 course which really helps!!
you should really cover everything in order to pass.
One needs to read extensively to grab these tips
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