[kris2024]

I had same questions albeit my Q2 was the bus valuation with 3 diff purchase considerations and Q3 was NPV calc with using CAPM to find Ke to then find WACC and then NPV – can’t remember exactly the comments on this one – I think it was around 13 marks for the NPV calc and stating assumptions and then last part was commenting on Director A and B comments on capital rationing and 5 professional marks available.

Q2 was acquisition of co with 3 purchase considerations – cash, share for share and mix of cash and diff share for share with recommendations / board consideration with data given on co gearing levels versus the industry average.

Q1 started with what factors should the co consider in setting up central treasury department for first time, board report then for other parts which included an atypical FX hedge for receipt US co receiving cash from generic/made up country as the time had already passed and you were to comment on whether or not the management accountants assertions that the forward rate was better than the currency futures and was due to basis risk, then work out the dividend capacity of a co which has remitted divs from a subs and also comment on the dividend policy of that co with reference to board comments.

Overall fair to hard end paper and very challenging time wise – very disappointing absolutely no interest rate risk and only FX risk question was complete curveball as had never seen one that was retrospective and laid out like it was. Probably slightly harder than majority of other papers I have seen without being the very hardest.

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