[dmnkaw]

@sharique123 said:
Hi Guys,

I agree the paper was quite hard. Following are all the answers:

MCQs Answers:
B
C
D
A
D
B
B
B
C
D

Q1 (A) – Comparatively Easy Question in the Paper to Handle:
NPV = + 1,848 (It is exact figure not approx)
Candidates were required simply to incorporate the effect of tax and inflation.

Q2 (A) – Tricky Question:
Forward Hedge was favorable. Value under forward hedge : 230,175 (Exact Figure)

Q3 (A) – Most difficult question of the paper:
Q3 (A) (i) – Market Value : 991 per loan note (Exact Figure) – No share option
Q3 (A) (ii) – Market Value : 942 per loan note (Exact Figure) – Share Option
Here I want to mention some mistakes which some people can make. Firstly if you have calculated the conversion value after seven years then the nominal value at which loan will be redeemed must also be taken at seven years. It means discounting only at 1 year backwards + you also need to discount one year interest payment backwards because value for comparison is available after seven years and loan note value can be found at seven years but one year interest payment must also be discounted.

Q4 (A) – WACC – 9.94% (Exact figure) – Here I want to people tell that whether they have calculated the cost of debt (Kd) using IRR method or used formula (i(1-T)/P).

Q5 (A) – Interest Payable = 211 (Exact figure).
Here 2 things must be considered that WIP was 50% complete so must be excluded from the working capital.

Are you sure about the Q2 ? I believe the company could save 9xx $ using money market hedge.

[dmnkaw]

price quantity growth periods nominal value
6.5 110 1.06 7 1075.095635 1000
6.5 110 1.04 7 940.8912222 1000

ANNUITY FACTOR
1 — 7 5.206
1–8 5.747
8 0.54
7 0.583

IF CONVERT ANNUITY 190.3958424
991.2007553 5.206
IF NOT
942.29 5.747 163.9620672

[dmnkaw]

1Q – NPV 18xx ?

[dmnkaw]

HI Guys,

In terms of Q3 I believe the issue was to calculcate NPV of cash flows and then divide it through annuity factor, as we cannot compare cash flows from different period. don’t you think so ?

BTW It was pretty tough comparing to quite repetitive and similar to each other previous exams.

[dmnkaw]

Me too! Please send me mind maps of ifrs. I need it badly dmn.kawecki@gmail.com. Begging 🙂

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