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Yeah , was dissapointed not to see a FRA for a few easy marks at the beginning.
My recollection is a 3.something % for the base rate and Growth of 4.something ? %
What did people recommend to The Board of Directors about Project A, B, C & D?
My recollection was A b and c has returns above the Cost of Capital , so I said if you can borrow / fund through equity do , and D was a very low return so don’t invest.I think that’s what I got.
Does anyone know the calculation for the 1/4 swaption at 5% was?!!?
I Hadn’t a breeze what to do on that so just answered with theory hoping for a few marks!
How did you use Capm ? I wanted to but I couldn’t work out the market risk premium for the equation.
Your plan sounds good!I found it really hard too. Defo got the Depreciation / capital allowances wrong in Q1. Hadn’t a clue what to do. What cost of capital did u use to discount the cash flows? Couldn’t figure out what to use. Used 12% myself. Aaaagggh, what a nightmare!
MCQ when someone selling a company – was the answer – the cost of replacing the assets?
For the MCQ on working capital of company – should the cash & cash equivalents & the short term borrowings have been included?
If you only included trade receivable & inventory – payables you got answer= 20
If you included T/R & inventory & cash equivalents – payables – short term borrowings you got answer =16.
Hi
Few questions- anyone do the same?anyone remember the MCQ with dividend of .12 cent 4 years ago & .17 cent current dividend. The growth worked out something crazy like 28% which threw off the DVM model for Market Value. Did anyone get this right?
Also in the section B NPV question I disregarded the €150k Working Capital amount & only put in the INCREMENTAL amount of inflation @ 4.7% as it wasn’t an outgoing relating to Year 1. Then I made a notation saying no refund of €150k will occur in Year 5 as production has not ceased & this W/C will continue to be needed.