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dear tutor if wrong option selected eg. call option instead of put whole question will be wrong or only 1-2 marks will be deducted.
What was answer for rational for hedging and communicating to stakeholders.
I wrote that the main objective is to maximise shareholders value whether are well diversified or notI took a differnce of 70% of pv and 1 m i wrote that pv of 70% was more favorable as 70% applications acceptable.
What was in Q2 option i chose 65 call options. And concluded that options had most favorable rate among all.
Tell me if I am right:
-in Currency futures/option while we borrow we generally choose strategy Put Option, Sell now Buy later when contracts Size is in Home currency. But if Contract size in foreign currency the Strategy will be opposite as mention above. for borrow, we will choose Call option and for futures, we will Buy now and sell later.thirdly if it is not given that what would be the spot rate at transaction date then how we will calculate the expected future rate
Secondly ,
Lurgshall Co Counterparty Interest rate differential
Fixed-rate 5·60% 6·10% 0·50%
Floating rate LIBOR + 0·50% LIBOR + 1·50% 1·00%
Lurgshall Co has an advantage in borrowing at both fixed and floating rates, but the floating rate advantage is larger.
Bank Charges 10 Basis Each
Gain % for Lurgshall Co = 50% (1 – 0·5 – 0·2) = 0·15My question is that,
Total Differential is 1.5% from which 0.2% bank charges
rest is shared equally .065 each but answer is different why
How he is calculating the benefitDear tutor i am confused between Ba=E/E+D(1-T)*Be and Ke(geared)=Ke(Ungeared)=(1-T)(Ke(u)-Kd){D/E}.
Can you plz clear it, in what situation we use these formulas.Question 2 Tippletine Co. march/june 2018 using M&M Model 2 to calculate Ungeared Ke . But you haven’t discuss it in your lectures.?
Can u explain how this formula working.
Ke(geared)=Ke(Ungeared)=(1-T)(Ke(u)-Kd){D/E}can i know when to calculate “lock in rate ” when all info is being given. kindly tell in simple words.
Can i know when to calculate Lock in rate in Question when all the info is being given in question?
dear tutor,
Do you have new questions and answers of Audit Report(Implications, criticism)?dear 2b was a contigent asset as it was known on dec 2015 that customer was in financial difficulties so it need to be assumed that its virtually certain and the deposite need to be initially made contigent asset then on cancellation it must be realised as income.
Q1 c . one ethical issue i identified that:
Investigation by tax authorities is indication of unethical activity has occurred so as a result there might be reputation risk for audit firm so need to resign……Q4.a i .difference wide scope/ timeline of audit
reasonable vs negative
detailed procedures vs analytical procedures usually
b. regulation so compliance
audit more reliable and preferable .
credibility as potential shareholders can rely and invest..
loan can be granted easily