[hanhvn]

Dear Mr Gromit,

I finally have passed P5 in September 2015 session and completed ACCA exams.
I would like to thank you and opentuition who helped us a lot during our P5.

Wishing all the best to you, Mr Moffat, other tutors and opentuition. You all make us more confident to fighting with the exams.

Thank you very much!

Best regards

Hanhvn

[hanhvn]

Hi 310zcx

I agree with you Mr Gromit did advise that in P5 (or F9), if we are asked to calculate the NPV we simply take the PBIT after tax add back the depreciation and that is all. We do not have to worry about the FCFF or FCFE.

But if we are in preparation for P4, we have to take into account the FCFF & FCFE carefully.

Cheers
Hanhvn

[hanhvn]

Thank you Mr Gromit & 310zcx.

[hanhvn]

Hi 310zcx

From my thinking, we are calculating NPV using free cash flow to the firm as a whole not free CF to equity (FCFE) thus we use the PBIT less tax add back depreciation.

If we calculate the value of the equity only then we deduct the interest.

Cheerr
Hanhvn

[hanhvn]

Thank you Mr Gromit.

[hanhvn]

Dear Mr Gromit

With regard to the performance measurement/management please advise:

if a company alter its normal budgeting approach into a beyond budgeting approach, will it be the change of performance measurement or performance management?

Many thanks.

Hanhvn

[hanhvn]

Dear Mr Gromit,

I have the same confusing problem with 310zcx.
I did not use 4.5% to calculate the MIRR but the same discount rate in estimating the NPV.

Would you please help us understanding the logic behind the use of 4.5% from the examiner’s answer?

Many thanks

Hanhvn

[hanhvn]

Thanks a lot Mr Gromit.

[hanhvn]

Dear Mr Moffat,

I should write to you with a separate message to thank you for all of your very helpful advice that “enable” me to pass this most difficult paper. However, together with other students, I think, will express our respect to you deeply.

I have finally passed P4 and will have one more, P5, to go. Without you, P4 would be an “impossible thing” for me.

Thank you very very very very much.

Thank you opentuition very much.

Hanhvn

[hanhvn]

Thank you very much Mr Moffat.

[hanhvn]

Ah, I got it.

Is it because in Fly 4000, the FCF growth of the 5 year-period (which is 6.3%/year) is different compared to the growth rate from year the 6th to perpetuity?

Mny thanks.

[hanhvn]

Dear Mr Moffat

Would you please advise why in Fly 4000 the estimated value includes present value of the latest forecast of the next 5 years with the terminal value estimated using the dividend growth model but in most of the questions, say question Wurall (June 2004), only the terminal value based on the FCF of the final year is used?

Many thanks

Hanh

[hanhvn]

Thank you very much, Mr Moffat.

[hanhvn]

Dear Mr Moffat,

So if the question asked to estimate the value of the share then we would have had to deduct the debt from the firm’s value similar to question Nente in June2012 ?

Thanks a lot.

Hanh

[hanhvn]

Dear Mr Moffat,

Even if the question states that “An informal, unpublicised, offer of 10mil for the company’s SHARES…” we should also assume that it is the Firm’s value, rather than the Equity’s value, that is to transfer?

Many thanks,
Hanhvn

[hanhvn]

Dear Mr Moffat

In this question, when considering the sale recommendation, the answer compares the estimated value of the existing operation using FCF (WACC to discount) with an un-offcial offer to see if it is worth the sale.

I think the estimated NPV (FCF discounted at WACC) is the value of the firm, thus it will the deduct the debt value to get the equity value. This equity value will then compare with the offer. However, the answer did not deduct the debt value. I must be wrong somewhere. Can you please explain on this?

Thanks

Hanhvn

[hanhvn]

Many thanks Mr Moffat.
I am highly appreciated for all of the helps from you and OP!

Thank you very much.

Please stay healthy :).

[hanhvn]

Thanks a lot Mr Moffat.

[hanhvn]

Many thanks Mr Gromit.

Many thanks Glorysuper.

[hanhvn]

Hi Mr Gromit

Question 3 Stillwater/ Dec.12 answers EVA using the opening CE while it uses the closing CE (for regulated service only) to calculate ROCE.

Can you please let us know why there is a difference, is it possible to use the closing or opening CE in both calculations ?

Also, I am trying to reconcile the 2ways of calculating the NOPAT but fail to do it right as follows:

1) NOPAT = PAT + net interest = 35.5+23 x0.75 = 52.75
2) = PBIT x (1-t) = 68 x 0.75 = 51

Can you help on this.

Many thanks

Hanhvn

[hanhvn]

Thank you very much for helping :).

[hanhvn]

Yippee 🙂

Many thanks.

[hanhvn]

Great! I am enlightened!

Getting know about this, in particular with your real examples, seems excellent.

Thank you very much.

[hanhvn]

Dear Mr Moffat,

I have a question in relation to the beta asset.

In this question, I am happy with the method of finding betas as instructed from the question’s information and from your further explanations. However, in the real life, would it be the case that the beta asset of the retail business sector is higher than the one in property as I think it is riskier when investing in property line?

Thanks alot.

Hanhvn

[hanhvn]

Dear Mr Moffat,

I have read the Lectures Notes but I am still confused and not understand the answer of questions Kenduri and Troder, all in part c, asking about the Greeks. Perhaps I have not possessed a good enough background on that.

For example, the answer in Kenduri stated that Gamma measures the rate of change of the delta of an option and the delta for a long call can be near zero to near 1…The highest Gamma values are when a call option is at the money….

Would you please elaborate more on the above example.

Thanks a lot.

Hanhvn

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