[qanjum]

Exam was not hard but complex.
Q1. (A) Calculate cost of capital was easy.
(B). Calculate mv of bond. Revised ke and wacc. Was not difficult but information gathering was complex.
FORGET OTHER REQUIREMENTS. I attempt for 22 marks as i run out of time.

Q2. pre tax revenue was given. We need to deduct fixed cost to get operating profit. Then deduct tax and add TDA. Then allow working capital and then remit cashflow.
After this as components cost was already included in cost. Therefore ignore cost but charge tax (tp-cost)* inflation *tax. And then i applied discount rate. I get -ve npv and proposed to use apv instead of npv as npv ignore financing side effects.
Other areas it cover includes political, economical, compliance, ethical and cultural risk.
Q3. Currency risk hedging. Forward rate was of first choice then futures and options. Lockinn rate, i calculate using september future and and think was about 40 contracts use future and .08 contracts hedge using forward rate. Similarly for options, as it was receipt case and so i will be selling currency and contract size was given in R currency- i use put option which gives lowest receipt.

Let me know if i missed anything!

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