[aznira]

Actually this question is a simple one. I don’t think they want APV though because there is no equity beta/asset beta. What if this question doesn’t want APV, can I just use revised wacc?

[aznira]

Okay now I get it. Thank you so much!

[aznira]

ACCA already publish the examiner’s report for July 2020. You can read it here
https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/p4/examiners-reports.html

[aznira]

Alright noted on that. Thank you! 🙂

[aznira]

I’ve read the article and from my understanding:

1)We should use yield curve+spread to calculate market value for new bond
2)Then, after we know the market value, we can calculate YTM using IRR method
3)YTM is the average required rate of return while yield curve is specific for year

For example, if the question ask for the market value of the bond but no information given on yield curve + spread. If the information clearly states the YTM%, then can I use the YTM instead?

In addition, YTM is the cost of debt after we incorporate tax in the calculation?

[aznira]

Ohh I understand now. Thank you so much for clarifying 🙂

[aznira]

Noted.Thank you!

[aznira]

Thank you for your advice! 🙂

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