[Izabela]

Q2 was a dream. Straight forward hedging. Did part a first and then moved on to q1 as wanted to get the calcs right in hedging before absorbing q1. I agree many working in q1. Would have thought at this level would not be a test of the speed of punching numbers in the calculator. Did my forward rates in w1. Discount factor was already given so no need to calc. So after remittance in $ adjusted for benefit of dtr of 5% and discounted at df given. Then worked out value of the put option using bsop. Ran out of time on report though. Stated the obvious and assumptions. Sadly did not have time to talk business risk and exchange and political risk. Agree way too much to ask in 90 mins.
Q2 was type 3 i think. Asset betas were already given. So had to find average asset beta and regear to find be of the combined. Gearing was already given so used that. Calculated ke then wacc of the combined. Since question asked for fcff used that to calculate pv of years 1 to 4 and to perpetuity. Combined value post acq less value of individual cos gave value to equity. Was just about to state no of shares post acq so that can work out premiums when it was all over… 🙁

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