Aggrochem 6/10

This topic has 5 replies, 3 voices, and was last updated 4 years ago by John Moffat.

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May 17, 2015 at 2:15 pm #246569
student07
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Sir in this question we r using 34.55 because we will b selli g peso to buy dollar,right,but why r we using 6.5% borrowing rate should not we use the investing rate as we will receive money 3 months late so we r loosing interest from that investment,please clarify.
Thanks
May 17, 2015 at 2:35 pm #246578
John Moffat
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Are you sure you are looking at Aggrochem from June 2010???
I have the examiners actual question and answer in front of me (from the ACCA website) and there are no pesos even mentioned in the question (and nor are any of the numbers that you mention).
May 17, 2015 at 7:13 pm #246636
student07
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Sorry sir it is Aggrochem but might be because its amended in Bpp so might be different figure. Thanks
May 18, 2015 at 6:47 am #246735
John Moffat
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I am sorry, but I don’t have the BPP version (and I don’t understand why they amend it – the original question was good enough 🙂 )
September 10, 2020 at 8:09 pm #584887
losercase
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How do we get 4.799m as value of equity ?
September 11, 2020 at 11:50 am #584966
John Moffat
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The workings are shown in the answer.
It is the PV of the free cash flow of 400,000 per annum, and to get the PV of an inflating cash flow we always use the dividend growth formula from the formula sheet, as I explain in my free lectures.
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