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Q.1> WACC 11% for Fodder and WACC 9% for Combined firm….. that was lengthy calcution than rest of the requirments for not that much tough if one have basic knowledge of acquisition and Capital Structure matters.
Q.2> Main issue was Future Spot rate after 4 months which is tricky rest was normal calculation……….
Q.3.Duration calculation by using formula……
1+y/y (1+y)+t(c-y)/c(1+y)wholepower t – 1 + y
where
c=coupon rate
y=yield to maturity (Which is to be calculated)
t= time to maturity ( 5 yrs)So easy 9 marks if u know the formula
Q.4 Pe=35 Pa=35.7 (PV of Cashflows) than discussion blah blah blah……..
Risk free is used when subsidized loan is given in the scenario……. However, if B debt is mentioned alongwith subsidized loan than Cost of debt is used………
AEIOU are the the substantive audit procedures which auditors perform to gather sufficient appropriate evidence, on which auditors based their audit opinion.
where as VCODRACE are used by the auditors to check the assertions made by the directors or top management in the financial statements.
@huma…….. u can study f8 at your own and i believe self study will give indepth knowledge of that particular subject
@kkaur……….. Go for p1 and p3 ………..
Q2 a) APV was used as both financial and business risk was changing as a result of that new project and PV of Interest income on subsidized loan and PV of tax saving due to interest payment both need to be calculated.
Q.2,Discount rate was 10% by MM with tax model i.e Keu
Q.1 a) easy marks just calculate receipts less payments there was no secured debt holders so the payment was going to unsecured debtors mostly.
Q.1b) required Free cash flow to firm
Q.1c) very confusing did lots of blunders 🙁
Q.1d) was depending on part c so it was so so
Q.2b) assumptions and suggestion ………. there were lots of assumptions like on subsidized loan risk free rate is used to find annuity factor since there is no B debt etc etc
Q.3a) Black Scholes find Call option than put call parity find put option price
then put option price was multiplied with no. of shares/ contract size of 100 .Q.3b) basic knowledge
Q.4a)Lots of calculations again like before implementing T.E proposal group tax was calcuted then 75% was applied on after tax profit dividend capacity was found almost same calculation after implementing T.E proposal.
Q.4b) required some ethical and regulatory considerations of Transfer pricing…..
So overall was a gud technical paper but very lengthy not a 3hrs exam.
It was my first attempt and hopefully the last one 🙂I m also in…….
Note: Transfer price is set on arm’s length basis(Market prices) if exam ques states that co. is willing to charge higher transfer price than market price than u must state that co. policy is not suitable as most government`s allow transfer price to be set on arms length basis due to tax purposes………..
Regards.
Saadat Hussain