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Easy or difficult paper, the pass rate is around 50%. So just do your best you can pass. Optional papers the pass rate is around 30%. That is more difficult.
Let me tell you that , no matter, whether the exam is easy , ok hard or difficult the pass rate is going to be around 35%. All of us know about this. Now if the paper is very easy, then there is a problem, because most of them would have done it well and ACCA will not increase their pass rates. So even if you have made a small mistake you will be penalised heavily. But if the paper is tough, then even a big mistake may be penalised moderately because they cannot lower the pass rates.
So personally, I prefer to face a tough paper and answer at least 85% of it. Then it is easier to pass. Most of the students start off with question1, and get stuck up and demotivated and they cannot answer the other easier questions and this is the reason why so many students feel frustrated. When you are attempting question 1, you must know that you have already scored some where around 25 to 30 marks and this will give you a lot of confidence and you can handle the question better?I think it is like this. The market price of 7.5 to multiply with the number of shares. That is 12000. Divide that by 7.2 which gives 1667, which is the free cash flow to equity of that company. Then find the FCFE of the other company and add the 400 synergy benefit. Add up all the three and multiply by 7.5. This gives about 19000 or 17000.approx (I am not sure)which is the FCFE of combined company. So increase in value is 17000 less 12000.
The 300.6 million is the debt capacity, which the company can borrow. If they borrow the 300.6 million, then the company will have 300.6 million plus the cash of 99 million which is 399.6 million.
I think, that depends on the credit rating of the company,current interest rate and company policy.
I would like to answer his question like this.. The hypothetical question is, if there are 500 shares and the market price per share is $5, then of course the company is worth $2500. But there is a debt of $200. So if I want to buy the company I will have to buy all the 500 shares and so I will have to pay $2500. No doubt about it. But you will also have to take the debt.
You must view it like this. The share price of $5 has taken into consideration the debt. Or in another words if the debt is not there the share price would have been more than $5.
Very sad. I missed the road and so caught in the jam. I was late by almost one hour. Three months of work spoiled by one mistake.
I think that net assets is total assets less total liabilities. This must be the sum that belongs to the shareholders (shareholders funds). But if assets consists of intangibles, then maybe the tangible shareholders fund may be different from shareholders fund shown in the books?
When you ungear the beta, the beta is for an ungeared company. But if you are finding the cost of equity of a geared company, you will have to regear back according to the capital structure of the said company. You just cannot use the ungeared beta to calculate the cost of equity of a geared company.