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August 20, 2018 at 2:37 pm
Hi John, In example 6(c) is the time value of 14% not taking into account?? Thanks
August 20, 2018 at 3:51 am
Sir i have a doubt in example 3.You said something related to ex div market value which i did not understand properly. Is it something like this? If they say that, the Cum div market value is 360c and dividend of 30c was about to be paid then Po(ex div) would be 360-30= 330 cents. Right? And cost of equity would be 30(1+0.08)/330 +0.08 Am i right?
John Moffat says
August 20, 2018 at 5:59 am
Yes, you are right.
August 20, 2018 at 4:04 pm
Thanks a lot
August 20, 2018 at 4:08 pm
You are welcome 🙂
September 1, 2017 at 4:26 pm
Help – For equity required rate of return When is appropriate to use CAPM , or the re-arranged growth formula as mention in the lecture (time frame 6.54) What is ACCA view on this
September 2, 2017 at 9:31 am
The ACCA does not have views on things like this!! 🙂
In theory both approaches would obviously give the same result. In practice they don’t and CAPM is regarded as better.
In the exam, the method you use is dependent on the information given in the question – both approaches are examined.
August 5, 2017 at 11:52 am
Should we be asked to comment on the accuracy of the estimated future Market Value per share as in Example 6 (c). Can we say that this subject to the accuracy of the dividend growth as well as the assumption that the shareholder required rate of return remain constant?
August 5, 2017 at 5:10 pm
It is nothing to do with the required rate of return being constant. The market value today depends on the rate of return they require as of today. In the future, required returns may change and therefore the market value will change.
It does however depend on the estimate of the expected dividend growth rate being correct. It is the expected rate of growth that determines the market value.
July 7, 2017 at 12:51 pm
Sir why question 1(chapter 17) is using different symbols for shareholders required rate of return ? In earlier chapter we used symbol ‘re’ and in this chapter its ke? I know its silly question but still thought of clarifying my doubt.
July 7, 2017 at 1:00 pm
The symbols both mean the same – it is annoying but it is because the examiner uses both symbols on the formula sheet 🙁
May 16, 2017 at 10:12 pm
hello sir hey you took the 4th under root to calculate average growth but sir calculator states the answer 1.15598 if we deduct 1 than we get the 15 % in example 4? is that i am getting it wrong or you made an error .?
May 16, 2017 at 10:16 pm
sorry sir ! i got the answer u did right . very sorry …. 🙂
May 17, 2017 at 7:19 am
No problem – I am pleased you are now sorted 🙂
February 1, 2017 at 8:22 pm
Exam 4 you mention years of growth, however between years 98 -99, there was no growth but a drop.
When you say growth do you still include this?
February 2, 2017 at 7:24 am
Of course – that is why I do it in the lecture!!!
The average growth is the average of both positive and negative growth.
February 4, 2017 at 1:50 pm
February 4, 2017 at 5:57 pm
January 17, 2017 at 12:10 pm
hello sir i have serious issues with F9 .. I have been failed 4th time in F9 .. please guide me to pass the F9 paper , i shal be vry thankful to you …
October 17, 2016 at 7:57 pm
Just one question. The statement “Shareholders usually have the power to increase dividends at annual general meetings of a company” is false. Why ? Is it because their ownership is dispersed by holding just a small proportion of shares, so they hardly can coordinate, or something else?
Thank you very much
October 18, 2016 at 7:54 am
It is the directors who determine the level of dividends. The most that the shareholders can do is vote to remove the directors.
October 26, 2016 at 12:36 pm
I see now. Thank you
October 26, 2016 at 2:02 pm
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