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Yes Time management was as ever a problem. I answered q2 and q3 first and then I was only left with 1 hour and 15 minutes for question 1. This paper was fair though and better then the June paper. Hopefully this time I have passed, feeling confident. I believe I got 9% for the WACC on Q3 also. The cost of equity may have been 10.4% but as it was a cashflow to firm you then had to WACC it once you did this then you came to 9%.
I had 2 weeks off work before the exam, went on a study course and revision course. did my mock exams to get my pass assurance with BPP, and I still found this paper (my last one) very very tough. Yes it was time pressured as most are but this paper is beyond a joke. I did Qs3 first and I feel I did well with this one as it was on hedging which is a big area of the syllabus so coincided with my study. However where do you go from there I went to Q2 as remembered doing something on P/E Ratio to value a company etc. and talked around Synergy, although didn’t understand the 2 different types I assumed it meant one to add value to the company and the other cost savings and cheaper financing etc, as they had surplus cash, whilst the other company had the expertise, also mentioned about breaking down barriers to entry etc. and easier access to markets, but who knows if that is what they were after. Q1 I only had an hour left so only answered parts a I and a ii and then the ethics part in b, did not get on to parts iii and iv so now I need 50 out of about 75 as I did not get the gamma part in the hedging question either. I understood how to calculate KEu and got 11% and I discounted using APV and FCFE. I also assumed no debt for the first part as paying of loans not sure if that is correct.,
My problem with this paper is:
– Too time pressured
– some big questions in part B focusing on smaller areas of the Syllabus, where was Black Scholes and options, where was Interest Rates hedging (Ok we had currency instead)
– all questions in the P&R Kit had more work to do on putting together the cashflows such as PPP to calculate exchange rates etc. Capital Allowances, Tax calculations, converting from one currency to another.
– where were the easy marks, learnt all the assumptions of the models as most past questions ask you to state these only to be not asked about even one.Very disappointed I just hope I get 50.