Thank you very much for not just writing formulas and doing calculations but explaining the logic behind the subject each time. I really appreciate all your effort.

In the video, you mentioned that the rearranged formula for the calculation of cost of equity is not given in the exam. But when I look at the past exam papers, I can see the rearranged formula in the formulae sheet. I just would like to make it sure that do we really need to learn the formula?

Thank you for all your hard work and making this resource available free of charge.

Just to let you know in the lecture notes (for Sep-Dec 2019 exam) you need to correct a typo in the answer for chapter 17 example 2. Currently it says Do is 30c but it should be 40 (the answer is the same though).

I think the answer in example 6 is wrong. In example 6, I can indicate that the dividend payout ratio is 0.2/0.32 = 37.5%. I think that the proportion retained should be b = 100 – 37.5 = 62.5%.

Provided that you are watching the free lectures that work through the lecture notes, then you do not really need the Study Text – they are a complete free course and cover everything needed to be able to pass the exam well.

The book that is essential is the Revision Kit because it contains lots of past exam (and other exam standard) questions. Question practice is vital to passing the exam.

The market value is always the present value of the future expected dividends. If we go forward a year in time, then the future dividends will all be higher by the dividend growth rate, and therefore the present value in a years time will also be higher by the same dividend growth rate.

(the required rate of return depends on the general rates of return in the country and the riskiness of the shares – it does not depend on the dividend growth rate)

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altun says

Hello Mr. John,

Thank you very much for not just writing formulas and doing calculations but explaining the logic behind the subject each time. I really appreciate all your effort.

In the video, you mentioned that the rearranged formula for the calculation of cost of equity is not given in the exam. But when I look at the past exam papers, I can see the rearranged formula in the formulae sheet. I just would like to make it sure that do we really need to learn the formula?

joelsasi says

Dear Mr John,

Thank you very much for your effort and i really appreciate the way you explain on every aspect in this Subject.

John Moffat says

Thank you for your comment 🙂

freddie1980 says

Hello John,

Thank you for all your hard work and making this resource available free of charge.

Just to let you know in the lecture notes (for Sep-Dec 2019 exam) you need to correct a typo in the answer for chapter 17 example 2. Currently it says Do is 30c but it should be 40 (the answer is the same though).

John Moffat says

Thank you for letting me know (and thank you for your comment).

vutuanminhpwcvn says

I think the answer in example 6 is wrong.

In example 6, I can indicate that the dividend payout ratio is 0.2/0.32 = 37.5%.

I think that the proportion retained should be b = 100 – 37.5 = 62.5%.

John Moffat says

No – the answer is correct.

The dividend payout ratio is indeed 020/0.32, but that is not equal to 37.5% !! It equals 62.5%, and so the proportion retained is 100 – 62.5 = 37.5%.

rohanyadav says

Sir are this online notes are enough to study for ….or do we have to study from kaplan textbook as well …

John Moffat says

Provided that you are watching the free lectures that work through the lecture notes, then you do not really need the Study Text – they are a complete free course and cover everything needed to be able to pass the exam well.

The book that is essential is the Revision Kit because it contains lots of past exam (and other exam standard) questions. Question practice is vital to passing the exam.

lilcool says

Are the lecture videos available to download as well?

John Moffat says

No – they can only be watched online.

vutuanminhpwcvn says

In example 6, why the market value of shares grow at the same rate of dividend, but not the required rate of return?

John Moffat says

The market value is always the present value of the future expected dividends.

If we go forward a year in time, then the future dividends will all be higher by the dividend growth rate, and therefore the present value in a years time will also be higher by the same dividend growth rate.

(the required rate of return depends on the general rates of return in the country and the riskiness of the shares – it does not depend on the dividend growth rate)