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Yes, so since the flows are in 6 months time and that i already have the expected spot echange rate in 6 months time of 3.03:
I do not need to do –> 3.03 *(1.02/1.01) to find the rate for in 6 months time since it is given and is 3.03…. 🙁
I don’t understand?
my question refers mainly to the fact that we are T1 in 6 months time so to use the expected spot echange rate in 6 months time and therefore no need to : 3.03 *(1.02/1.01)
since 3.03 is in six monthsHi,
you say “the first operating cash flows will occur 12 months after the start ” ?
But in the exhibit 4 it is written “the sales and production in six months time are estimated as follows”
Therefore, the components costs given are also in 6 months time.
Therefore, the T1 component costs should be translated with the expected spot exhange rate in 6 months time which is 3.03 and not 3.03 *(1.02/1.01) = 3.06
no?Not sure I undertstand your reply sir…
But anyway I figured that the interest calculated is not on the PV of repayment but on the balance of the loan which is not PV’d.
Therefore there is no double discounting
ThanksJust calculated and they have the same gearing yes, but this needs a calculation, could not see it directly…
I saw the answers while in the self mark “system” but then when you finish self marking, their is no way to re view the ACCA answers 🙁
Ok thanks ill askMany thanks John 🙂
Also, regarding interest rate option premiums, generally if they are annual % we need to do x 3/12 (for 3 month contracts) ?
As in some answers they do in some they don’t… When don’t we?Thanks! 🙂
also, do you know if there is anything new added to AFM technical articles this year? There is no date mention anymore
and sometimes examiners report say to look for new articles added
thanksHi,
but in this topic:
https://opentuition.com/topic/kingtim-co-afm-specimen-from-sep-2022-onwards/
You replied yes to the person who asked if he could do IRR of pretax flows x (1-t)
no?
Thanks..
Agree, but when the examiner report explicitly states :
“Furthermore many candidates seemed to misread the question and instead of calculating the gain to the shareholders that would arise from the business combination, they were instead calculating the share of the additional value, calculated earlier, that would accrue to each shareholder
group.”Then I feel like I would have failed this part 🙁
My question is why is it not relevant in APV; I am looking for the rationale behind as I am not really into merely applying formulas without really understanding the logic behind… If there were to be significant interest expenses, it would definitely have an impact of this appearing in the calculation and not merely tax savings and subsidies..
Yes I did but my question is not covered.
I know how APV is calculated; there is the tax shield and subsidiy but I mean the ACTUAL interest expense paid, since it is a cost of capital as if all equity financed, then the ACTUAL interest expense should also be included when calculating APV no? Not just tax shield and subisdy..Also, when using the other spread, the ARD becomes the “base” and therefore to use PPP I need to do 1.015/1.09 or it stays as 1.09/1.015?
Very confusing this whole cross exchange rate thing…
Hi,
Chikepe question 1 appendix 1 when calculating equity value of Foshoro, I used FCFE method which I found quicker with CAPM instead of removing interest then calculating tax then finding FCFF then finding FCFE.However, this is not supposed to give the same answer as FCFF right?
Thanks