[lakeside]

Also what hedge does this qualification give? Thanks

[lakeside]

Hello All,

I am planning to take this exam (guess it is in December), I’m an ACCA Affiliate. Can i self study? I qualified as ACCA by self study too.

Please advise

Thanks

[lakeside]

John Moffat, Many thanks!!

[lakeside]

Finally Affiliate!!!

[lakeside]

I am so hopeful that this time it will be over with P4 and can say ACCA Finally. Been a long battle.

[lakeside]

Anyone got this today from ACCA Student Accountant?

Visit the SA hub + online resources to help you

[lakeside]

@captmario

I just feel same, I wish I had a neighbour that will be awake to read the text for me. But I hope all will be well.

[lakeside]

@ James, I really support what you said. This is my final Paper to qualify as ACCA and my 5th attempt. I have never in my life repeated any exam more than 2 times (never!).

Most of my other papers in ACCA were just passed at one sitting. I also have ACA qualification from my country and CISA qualified too. So this is making me look like I don’t know what I am doing??

Like you said, it’s looking like a means to an end which shouldn’t be. I do not see the point the examiner is trying to make for students to make a pass with the numerous information overload under the 3 hours. (not being reasonable).

I don’t know if there is any other medium to pass these feed-backs to ACCA except the survey we are asked to complete each time after the exam (which I assume has no bearing with the marking/result).

ACCA cannot continue to act like ‘All in All’. Many students really labor to study so hard and not expected to keep feeling like we still have not done enough.

Anyways, I did my best and I just must pass this time.

Good-luck to everyone too.

[lakeside]

Anyone Answered Question 4??

Q4
(i) We were to talk about Real options and Investment appraisals (delay, expand, redeploy and abandon)

(ii) Had no clue to be honest But still talked about how options can help maximize equity value if considered?

(iii) factors affecting options – value of the asset, exercise price, risk free rate etc?

Vega relates to Volatility (less volatility, less value of option and vice versa?)

[lakeside]

Anyone did question 4? Seems im alone.

[lakeside]

@captmario Well hope i get some marks for doing to the point of Macauly

[lakeside]

Paper was information overloaded and bit hard (especially Q1). How can we be expected to attempt all within 3 hours?

Q1
I just had to assume a spot rate on date of transaction and do the calculations that way.

Modified Duration – Did that mean Macualy?

Swap Benefit ( Gain for each party was 40 basis point?), so for Cocoa will be fixed rate less 40 basis per annum?

Q2
NPV was positive after redoing it using APV
Was the DCF 12% approx after using Asset Beta of 1.2 from the Proxy Company?
then Add Financing Effects

Q4
(i) We were to talk about Real options and Investment appraisals (delay, expand, redeploy and abandon)

(ii) Had no clue to be honest But still talked about how options can help maximize equity value if considered?

(iii) factors affecting options – value of the asset, exercise price, risk free rate etc?

Vega relates to Volatility (less volatility, less value of option and vice versa?)

All i just believe is I will PASS and wish everybody same.

[lakeside]

Can’t thank you enough really.

[lakeside]

Thanks for all your support

[lakeside]

Dear Tutor,

Just to shed more light on this (understood but no harm clarifying further i guess). You have responded in most of the post that the Beta of Equity will always be used to get the Ke (except all Equity Financed)

Once we use the asset beta of a proxy company given (even if the gearing of the project does not change), so far the capital structure of the company has debt and equity, we will always Re-gear using the existing gearing ratio to get the Beta for Equity? , hence reflect the risk to shareholders.

I am just comparing to your lectures on ‘The Impact of Financing Example 1 & 2’.

[lakeside]

Dear Tutor,

In the exam, if we have 3 strike prices say, 90, 92 and 94. And I have chosen say 90 as my Put strike because i am borrowing, to compute for Collars, do i have to use each of the 3 strike prices individually and compare or i just select one?

From the exam paper in June 11, there were 2 strike prices, One was already chosen as the Put and the other was selected to calculate the collar.

Please advice

Thanks

[lakeside]

Great! and thanks.

[lakeside]

Had a rethink just now and hink i figured it out.

Taking Question A for example

Futures of 93.20 is actually 6.8%

So if LIBOR falls, Futures will go up. To reflect the Futures increase, then the Interest of 0.85% must reduce the 6.8% above (i.e 6.8% – 0.85% = 5.95%) which is equivalent of 94.05 Futures.

I understand the concept but the way it was worded that futures moved by 0.85% was what confused me initially.

Hope I got it now?.

[lakeside]

Thanks a lot.

[lakeside]

Really appreciated.

Many thanks

[lakeside]

Dear Tutor,

Thanks for your answer but i need further clarification.

I have seen 2 worked examples (BPP – my study text) on the weighted average beta issue

CASE 1
Only book value of equity and debt was available for both companies

Solution
Total Value of A (i.e book values of Debt & Equity)/Total Values of A&B (debt &equity – book values) + Total Value of B (book values of Debt & Equity)/Total Values of A&B (debt &equity) multiplied by their respective betas.

CASE 2
Given ( book value of debt and Mkt Value of equity)

Solution
ONLY the Mkt values of equity of both companies was used for the weightings (please note that the question was silent on how to weight the average beta)

I understand you have asked us to use Equity values as the weightings in your response above. Does this apply even when we are given Mkt Values of both Equity and Debt (for both companies) in the exam , we should still use ONLY equity for the average beta weighting?

In addition if we had CASE 1 above in the exam, what will be your advise on the weighting to use.

Lastly when we get the average beta and we need to gear it to get Equity Beta of the combined company. what is the correct weightings to use under the following circumstances below…..supposing we are not given the gearing ratio of the combined company like in Dec 2013, Q 3?

A. The acquisition will be financed by debt only
B The acquisition will be share for share exchange
C The acquisition will be all cash

Sorry i know i have asked a lot (need to pass this time)

Many thanks in advance

[lakeside]

Many Thanks, gaining more confidence this time.

[lakeside]

Many Thanks for clarifying this.

[lakeside]

Thanks, I thought as much that the solution may be a typo error. PPP has ever been calculated as you correctly stated above whether the home currency inflation rate is higher or lower compared to the foreign currency inflation rate.

Please can i just ask, what happens if we are just told the home currency deflates by a constant rate (say 3%) and no other rate was given for the foreign currency, and vice versa?

Thanks

[lakeside]

Hi, please can i borrow some advice from you, this is my 4th attempt.

If you can email me on lanreoye@yahoo.com, will be appreciated

[Author]

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