Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Lectures – The impact of financing part 1 – Clarification – Example 1

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Lectures – The impact of financing part 1 – Clarification – Example 1

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • September 3, 2019 at 12:29 pm #544470
    Anonymous
    Inactive
    • Topics: 5
    • Replies: 4
    • ☆

    Hello,

    First of all, thank you for your lectures! Great material and help.

    In the first part of the lecture “The impact of financing” around minute 12:30, you’ve been explaining the alternative solution of example 1 from the notes (chapter 12). You have mentioned that instead of using M&M equation we could use the Beta formula. However, there is no market return which I could use to calculate the market premium and at the end get the Beta.
    Is there any way around this issue?

    Regards,
    PJ

    September 3, 2019 at 2:20 pm #544493
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54656
    • ☆☆☆☆☆

    You can only do it that way using algebra and letting the market return be X. As you work through the equations you will find that X ends up disappearing 🙂

    However I really would not spend time doing it – it takes longer and there is more chance of making mistakes.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.