[SoloYz]

i got that interest is tax deductible, but what i want to know is what is the difference between “after tax” and ‘after-tax”. ‘after tax’ is deducted and ‘after-tax’ is interest, is it right?

[SoloYz]

ok, the explanation is great and i understood it clearly. BUT all this is based on the answer, so we know either use share price to get it or EPS. Without knowing the answer and base on what the question asked us, how do we actually know which to use to get the correct answer. And the amount of share price and EPS for both company is unknown.

Example: PER
GWW 15 working : 30/2 OR 45/3
Competitor 16 working : 32/2 OR 48/3

(In this case, if GWW Co has a higher P/E ratio, it means that its market value is higher relative to its earnings per share compared to its competitor). Due to lock of information and question ask us to assume, why can’t the GWW PER be lower compare to the competitor, while using share price or EPS.

all this confusion and counterintuitive approach, just for a 2marks questions. Or does it really given the wrong answer, as u said they are human after all

[SoloYz]

i know u not only serve me, i just brough out is there any mistake the hub had make. and i did watched the video and they are just explain easy question . i did comment and no one reply. but anyway, thanks for your time

[SoloYz]

yes, i understand. these is a section B question, and just released on 12th acca sept mock exam. the question that it asked is what i shown above.

Assuming that the expected exchange rate is €1.4070 in 4 months’ time; calculate the gain or loss for McGregor company if it had hedged the €2.1 million receipt today using a forward rate of 1.3995 (to the nearest dollar amount).

this is thee whole question. every possible calculation i had tried but the answer shown was so illogical. they do show the working and calculated the $7999 but the answer shown was the$1.4million

[SoloYz]

this question i get from ACCA pre-sept mock exam, question 25

the exchange rate does it means €1.4070:$1 and €1.3995:$1
so means that we are getting less $ because we using more € to get $
i found the solution for $7,999 [(2.1 million/1.4070)-(2.1 million/1.3995)
the formula u shown, i did use it in the test and the result was $15750 and is wrong answer
but if we do it in this way [(1.4070 – 1.3995) * €2.1 million] it does not seem logic as we receiving less $ means we are going to divide

the most logical calculation to me is the result of $7999

[SoloYz]

ok, thanks for the reply and sorry for that. i did ask separately but no one answering.

so for the dividend yield for ordinary shares only take in interim ordinary dividend and final dividend, so as the preference shares. they do not take in others interim into their account, do i understand it correctly.

[SoloYz]

other than this question, would u like to explain to me about the interim and exchange rate here are some examples

example : interim dividend
Geed Co paid an interim dividend of $0.06 per ordinary share on 31 OCT 20×6 and declared a final dividend of $0.08 on 31 DEC 20×6. the ordinary share in Geed Co are trading at a cum-div price of $1.83.

dividend yield = [(0.06+0.08)/(1.83-0.08)]

my question here is what if the interim dividend is paid under preference share but not ordinary share. do we still need to add into the calculation. or they add back into their own category

example : exchange rate

peso : $
Spot exchange rate 5.467 – 5.498
Six-month forward rate 5.521- 5.545

in section B question, normally will be given (Spot exchange rate) and (Six-month forward rate). how to identify which to in a questions

[SoloYz]

but in section C question, i did faced that the question did not ask for after-tax but the cost of debt need to be kd(1-t). and the final calculation is to find out wacc but not mentioned is after-tax. so does it mean in section C, whenever we faced calculation of wacc every calculation must take in the tax? or calculation of wacc is needed to take in tax in every section?

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