Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Lignum Dec 12-Real option valuation
- This topic has 7 replies, 2 voices, and was last updated 8 years ago by John Moffat.
- AuthorPosts
- May 30, 2016 at 3:01 am #318003
Dear John,
in the question I do not understand
+ why the investment in year 3 not be discounted at WACC to claculate Pe
+ Development cost normally be ignored as a past cost, but in the question the cost be considered as project costThanks for clarification
May 31, 2016 at 3:06 am #318239Dear John, pls. clarify the issues
Thanks
May 31, 2016 at 7:48 am #318292I have the December 2012 real exam in front of me, and the question Lignum has nothing about real options in either the question or the answer!
May 31, 2016 at 8:20 am #318298Sorry Sir, the question be modified in the latest BPP revision book, I will copy the question when I back home
June 1, 2016 at 5:38 am #318541Dear John, the forum did not allow to attach any file, therefore I could not show the question, anyway, the principle of value the Real option is the Pa and P3 should be calculated base on Present value, is it right, as someone said the Pe should not be discounted as in the BSOP formula, the Pe x e is discounted already, pls. advise
Much thanksJune 1, 2016 at 9:18 am #318581Without seeing the actual question, Pe should not be discounted – it is the exercise price and is there the exact (undiscounted) amount.
June 1, 2016 at 9:44 am #318590I would be appreciated if you could share your email in my personal email: pnmphuong@gmail.com, so that i could send you the question and we finally could sort out the unclear issues, thanks
June 1, 2016 at 3:20 pm #318638I am sorry but we cannot provide individual help by email.
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