[Musa]

Okay. Thanks a lot.

[Musa]

Another clarification please: Q4ciii. Why when the debt/equity ratio was calculated on book value basis, the entire shareholders equity (including reserves ) $67.2mm was used but only ordinary shares used for calculating on a market value basis? I.e why wasn’t reserves considered as equity in part iii?

Thanks.

[Musa]

Ok. Thanks. I was getting the 16.7% also so was a bit confused.

[Musa]

Hi Mr Moffat, re Q3 Dec 2012, in part a it was assumed that the overdraft was ignored for computation of WACC which I found very surprising especially given that it is not a insignificant amt. Is this a reasonable assumption? Can we make similar assumptions in the exam and state that assumption?

Also for part c, in paragraph 2 of the answer there is reference to a rate if 6.5% which I am unable to work back. Please clarify.

Many thanks
Musa

[Musa]

Ok understood. I was taking the inflated amt for Y1 and multiplying it by 1.03…..great, thanks a lot once again.

[Musa]

Thanks a lot!! Clarification much appreciated.

[Musa]

Hi, I am interested as well. My number is 14734092712

[Author]

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