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@noushie2008 said:
I did, I used it to explain the ethical part then I used tucker’s 5 for commercial.I used zero other models except for SAF for Q3
What did you write for tuckers? I only mentioned profitability issue (since recall cost will increase, sales will decrease) + reputation risks and nothing else.
Guys did anyone wrote about integrity, objectivity and professionel competence and due care for ethical issues?
I have done it in March 2019. It is my subjective opinion, the module didnt help me a lot. Instead I would advise to go through SBL technical articles and videos about professional marks on acca website. This was my mistake in March 2019 not reading technical articles.
I am also going to resit this in June. I failed with 44. What I was advised that it is worth to go through all questions again and again. It is not about quantity its about quality. Go deeper to understand what answer the examiner wants to see. Analyse every answer to formulate your exam strategy. Also analyse and clearly understand what professional marks are. Because this will help you to construct the correct answer style to the questions. This was my mistake I didnt understand the professional marks and my answers looked very simple probably since failing with 44 is marginal fail. Also I plan to do lots of mocks since there are 4 mocks at the end of BPP Kit + 3 specimen + 2 past papers. I hope to pass this time and wishing the same to you. Good luck.
@jez22 said:
Had to do Q3 in a rush, the target value could be calculated in two ways; on share price value that was around 540 m if I remember correctly and based on dividend growth rate. The question stated that 90% of the distributable profit has been paid out as dividends. 10% retention x 14.5% return on capital( CAPM as the beta was given) gave me a growth rate of 1.45%. using the growth formula with the 63m dividend (90% of the 70m profit) resulted in 489.8 MV which was the minimum they would have accepted as aquisition price.The value of the combined company was the after tax profit figure of the target (70) + the additional synergy cash flow (9) + the profit of the aquiring company (forgot the figure) multiplied by 8 + the increase of 5 % (8.4) which was something like 1100 m.
From this figure the MV of the aquiring company and the 489.8 + the 14% premium had to be deducted to get to the total additional value created.
If 60% of the additional value would have gone to the shareholders of the acquiring company, the remaining 40% would have been the amount paid on top.
Can anyone confirm?
I calculated minimum price as finding market capitalisation + 14% premium + 40% synergy (since predator wants to keep 60% of gain).
@aishling82 said:
Q2 Interest rate risk: FRA, Futures & collars
Q1 Change of capital structure with bonds. Calculation government yield, bond valuation & yield. New asset beta & cost of equity etc. No similar past papers like it.
Q3 potential merger/ acquisition of 2 different companies. FCFE figures provided no cash flow calculations.Q2 was probably most predictable and similar to other past papers. The other 2 were challenging!! No investment appraisal or fcfe calculations
In Q3, minimum acceptable price, was there net asset of the target company? I couldnt find thats why I found MV of equity + 60% of synergy.
@beatab said:
I think it said option collars…
You are not the only one who did options instead of collars.The question was quite similar to Sep-dec 17 past paper Q4.
Guys, the question regarding hedging, I believe didnt mentioned about collars, it said options on interest rate futures. where did you notice “collars”?
Risk adjusted WACC, FRA, futures, options – interest rate risk, APV, benefits of acquisition, what to consider when getting debt finance, pre-bit & post-bid strategies against takeover, etc.
guys on Q1, I calculated asset beta using weighted average method – based on equity of 2 companies. I think asset beta at the end was equal to 0.53.
Then I dont remember how I calculated risk adjusted Ke. I dont know it seems I used asset beta itself instead of equity beta on CAPM model. MV of equtiy of the company was $1800 m but I could not find MV of debt to regear.
How did you calculated risk adjusted Ke?
What was the mark allocation for Q2 options? 16 mark?
What about Q3 mark allocation? part b was 10 mark. not sure a and c parts
Q1- a 8 mark, b-1 7 mark, b2 15 mark, b3 5 mark, b4 6 mark, 4 professional marks and part c 5 mark
In Q1-b. cost of debt was risk free rate from one year bond + 1.29% credit spread = 3+1.29 = 4.29%?
Also was there net asset of target company in Q3 to calculate minimum acceptable bid?
@mshoaib1997, Kaplan Study guide – you mean Kaplan textbook?
I am also for SBR UK and a little bit confused whether to start with OT lectures since it is mentioned as SBR-INT. It would be better if Tutor can allocate his time to answer this question ASAP. Thanks in advance!
Hi Tutor,
I always use opentuition videos during my acca preparation. Thank you for your all effort. I registered for SBR-UK. Are your SBR-INT videos suitable for UK version as well?
