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Sir I came across a WACC mcq. I can’t really get the right answer for the questions. Although it looks easy but I’m stuck on the MV of the debt and its cost.
It says: 50c ordinary shares at $12m
8% $1 preference shares at $6m
12.5% loan notes 20×6 at $8m
Loan notes are redeemable at nominal value in 20×6. Current market prices are –
50c ordinary shares at 250c
8% $1 preference shares at 92c
12.5% loan notes 20×6 at $100
Corporation tax at 30%
Cost of the company’s equity capital is 18%. We are required to calculate the WACC
Kindly can you show me how to do each step and then put it altogether in the formula. I got my answer wrong when I did it and when I checke for the answer at the back, it showed all of the values put together in the formula without any workings which got me more confused.Hello sir
I studied from Kaplan for F6 but now since exams are approaching I don’t remember most of the important theories from the text and I can’t revise the full book again as there’s less time and I’m doing my practise session. So is it okay if I just go through the OT notes and the bpp passcards?Sir can you tell me which topics I should focus on for Section B although I’ve revised all of the topics thoroughly, I just wanted to know which topics are the most likely to come for Section B
Sir can you explain me the answer for scenario (iii) in the last question, Business Solutions of the Revision notes?
Why the company needs to set a cross charge that discourages a consultant going North, I.e above 500 but below 700?Hello Sir,
I’m kinda doubtful about my decision tree diagram from the revision notes
Anyhow I reached the conclusion that, Charming plc should buy Machine A, if demand will be high then there will be no scrap value after 10 years, and if demand will be low then we will invest additional $5000 to generate $1500 for the next 5 years.
Is this correct Sir?Hello Sir. I have problem in making the Profit table for Risk and Uncertainty Chapter.
I have come across a question from the revision notes.
Sales per week :
Sales (units) Probability
10 0.3
20. 0.5
30. 0.2
Selling price : $20 p.u
Cost: $10 p.u
Any unsold units must be sold as scrap for $1 p.u
The company can contract to purchase 10, 20 or 30 units each week
How many units should they contract for?
Sir I have tried to work out the values for the profit Table but I’m not getting the same values as it is in the answer.
Can you please tell me how to calculate the values?hello Sir.
I just started practicing for F5 after finishing the lectures.
so I thought to begin with the Test questions given in the end of each chapter from the opentuition notes.
Sir I have a doubt in the test questions 4 and 5 of chapter 17
In Q4 for the residual income, we multiplied the sales to be generated per year with operating profit margin and then multiplied the capital investment required with the cost of capital. Then we subtracted both the answers we got,
but in Q5 the case was different
they gave us return on investment percentage instead of operating profit margin
so to find out the residual income: we had to multiply the capital investment with ROI and then with the cost of capital as well. then the last was same to subtract both the values you got,
I’m really confused, I didn’t even write down the formula for Residual income. And I also can’t remember the concept clearly. Why we had to do it differently in both the questions?Sir, can we expect marginal costing questions in the exam. Since I’m studying from BPP 2010 as well as open tuituion notes.
And do I really need to go through this kaplan text?
Because I also have bpp pass cards 2015Okay thanks for your suggestion.
And I also do have passcards for f5 exams upto june 2015hello.
I have f5 bpp text of 2009. Do I need to get 2015 text. is there much difference between the texts?