Forum Replies Created
- Posts
I was pretty happy with the morning exam and would like to think I’ve passed with a bit of margin.
I did the morning exam which consisted of (not fully sure on the mark allocations, so may be a bit off):
Q1:
Memorandum:
Research costs (5 marks)
Interest payable (8 marks)
Loss relief of a new subsidiary (9 marks)
Ethics – HMRC refund (5 marks)
Letter:
Temp res and CGT (7 marks)
IHT on lifetime gift (6 marks)
Professional marks (10 marks)Q2:
NRB and RNRB (5 marks)
CGT on share sale assuming full reliefs (6 marks)
Stopping using VAT flat rate (5 marks)
*think I’m missing a question worth 4 marks*
Professional marks (5 marks)Q3:
BADR and sale of assets (warehouse/P&M) (6 marks)
Personal pension scheme contributions (8 marks)
FHA conditions and advantage (6 marks)
Professional marks (5 marks)Can anyone remember if I’m missing a question part in Q2 or if my mark allocation is just completely wrong?
1. I mainly talked about options (including with the collar) will be more expensive than an interest swap, as it still lets you partly take advantage of a favourable movement (semi-fixed interest rate rather than fixed). So it may be better if you’re unsure on if you think the interest rate will go up/down. And swap May be better if you think it will go down. Wasn’t sure what more to put.
2. I just talked about no capital rationing being ideal in theory but not suitable in reality. If it undertook all positive NPV projects it would likely run out of cash at some point, have cash flow problems, miss potentially better projects, etc
3. Can’t fully remember this, but definitely 4-7 I think
Personally I was very happy with this paper, parts of question 1 I wasn’t great, but in general preferred this over most the past papers I’d done.
I did the morning exam. For those struggling to remember I think the questions and allocations were:
1.1 Agency problems with takeover (5 marks)
1.2 Cost of capital calculation (5 marks)
1.3 Value to shareholders (11 marks)
1.4 % change in value and dividend (8 marks)
1.5 Concerns and assumptions (6 marks)
1.6 Share buyback as defence (5 marks)
Professional marks (10 marks)2.1 NPV analysis (8 marks)
2.2 Capital rationing (5 marks)
2.3 Multi-period rationing (3 marks)
2.4 Stopping soft rationing (4 marks)
Professional marks (5 marks)3.1 FRA and int rate futures (8 marks)
3.2 Swap and comparison to collar on options (6 marks)
3.3 Additional collar thoughts? (6 marks)
Professional marks (5 marks)Overall, I thought there was a decent variety of questions and split into many parts which always helps. Also not too many exhibits and not too heavy info which helps also!