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Found this paper quite hard…. Mvs oh gosh……….. 🙁 MCQs pls save me and the last two questions….
Paper was OK… Messed up the last question because I ran short of time. Fingers crossed for Jan 18th.
Hi
Are they gonna publish the paper with answers before 18th Jan?
They didn’t do for sep exam.
ThanksMoney market hedge is acceptable.
Discount on receivable management isn’t feasible.
Npv Positive.
Effect on WACC increases.
Mcqs:
C
C
A
A
D
A
D
C
C
A
A
B
B
B
C
A
B
D
A
B@addy007 said:
Money market hedge is acceptable.Discount on receivable management isn’t feasible.
Npv Positive.
Effect on WACC increases.
did you take into account the additional profit for the receivables discount question?I found section B fairly ok and think I should get 50% on this section, although I was very pushed for time and rushed my last answer.
I thought Section A was tricky and to make an educated guess at a lot of those questions. I hope it doesn’t pull my mark down too much.
@addy007 said:
Money market hedge is acceptable.Discount on receivable management isn’t feasible.
Npv Positive.
Effect on WACC increases.
Discount included an increase in credit sales of 20% which meant increase in profits, overall benefit was higher if discount option is taken
Affect on WACC decreases for me from 11% something to 10.5 %
NPV was positive something around 90k
Leading was cheap.. all three were around 30k with difference of 1000 something..
Settlement discount should be accepted.. 50K something benefit… 18k something cost..
I can’t remember figures accurately so they are not precise..
Gearing was 40 something 🙁
Theory was subjective of course..
For last question I calculated WACC before taking in account issue of new finance.. than I calculated taking it into account..
what you guys did?
leading was cheap for me also but I wasnt sure if we were supposed to add borrowing costs? because they mentioned being short of funds and payment was due in 6 months.. if we had to apply interest then it would have changed answer.
for MCQ I had:
B
A
B
A
C
A
for the first 6and
D
A
D
A
D
for the last 5, thats all I remember@jaypee24 said:
leading was cheap for me also but I wasnt sure if we were supposed to add borrowing costs? because they mentioned being short of funds and payment was due in 6 months.. if we had to apply interest then it would have changed answer.for MCQ I had:
B
A
B
A
C
A
for the first 6and
D
A
D
A
D
for the last 5, thats all I rememberI did take interest… i guess we have to take it into account..
I did the same I can’t remember what it was but it reduced from like 11.5% to something lower can’t remember the exact figures
@ehsanshah said:
For last question I calculated WACC before taking in account issue of new finance.. than I calculated taking it into account..what you guys did?
yes same but i got WACC intially 11.4%,after the new loan notes 11%,then talk about M&M….Q4b are they asking about capital rationing?
for the last MCQ I added 17cents back to the share price, not sure why though! it was either C or D, I thought C would have been too easy for a 2 mark question so decided to be a bit creative! lol
Yes I wrote about capital rationing and I think my WACC also reduced to 11% too after the loan note issue!
@misschile100 said:
Yes I wrote about capital rationing and I think my WACC also reduced to 11% too after the loan note issue!hooray!hope it is the right answer.
@ehsanshah said:
For last question I calculated WACC before taking in account issue of new finance.. than I calculated taking it into account..what you guys did?
That’s the right way to do it I think. Unfortunately for me my laziness got in my way and I thought I would calculate WAcc without taking the new finance into account at the end but I forgot!!!?
@tyjtht said:
hooray!hope it is the right answer.I hope so too!!
What was your market value debt to equity gearing ratio?
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