P4 – exam tips – December 2013 (LSBF, Opentuition, BPP, First Intuition, Kaplan)

Exam tips are out! Enjoy but do not rely on them.

LSBF

cost of capital using the principles of Modigliani and Miller prepositions or geared and ungeared betas.
– International investment appraisal with adjusted present values or net present values.
– Mergers and acquisitions – valuation using free cash flows, defensive tactics and regulations of takeovers
– capital reconstruction schemes – designing a capital reconstruction scheme or assessing the success of a given scheme
– option pricing theory. Real options, example, option to abandon, expand and delay. Valuation of company using the Black-Scholes option pricing model and delta hedge.
– hedging exchange rate and interest rate risk using futures, options and swaps
– Islamic finance

Opentuition

Compulsory question:
Report including:
Investment appraisal of foreign investment with inflation / tax / forecasting of exchange rates
Calculation of WACC (involving CAPM)
Consideration of various sources of finance

Choice questions:
Interest rate risk management
Option pricing

Written question relating to the transferring of profits to countries with lower tax rates, by multi-nationals.

BPP

• Discounted cash flow – possibly with an overseas context.
• Business valuations – cost of capital and hedging.
• Risk management.
• The Black Scholes model.
• Cost of capital calculations.
• Islamic finance.

First Intuition

* International investment appraisal techniques focusing on risk management tools such as value at risk.
* Impact on WACC following hedging of interest rate risk.
* Company valuation based scenario, possible MBO finance to structure.
* Adjusted present value with link to real options and Black Scholes option pricing model.

Kaplan Financial

• Business valuation, especially using the free cash flow to firm methodology.
• Net Present Value – including foreign currency cash flows.
• Black Scholes option pricing model.
• Discussion of financing options, including Islamic finance.
• Interest rate hedging – options, futures and FRAs.

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Source: https://www.pqaccountant.com/
Very best of luck with your exams!
ansi