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I got $2.88 too and I know it was wrong… I spent ages trying to find the discount rate for debt and figured out on my way home….. the question gives the coupon is 5%, book value is $60 and financing cost is $4.5m, should we use the 5% as discount to get the Vd?
after the panic in part (b) I couldn’t concentrate to get the share for share for part (c)…..
put down some calculation for Metaxi’s cash flow but I wonder if they are useful for the marker….. sigh….
Very tough paper…really struggled with time management and Q1
Q4 I had option better than collar better than futures. Basis for Sep future was 0.12% (0.48*1/4) so effectively lock in rate was 4.08% (can’t remember exactly the number). I calculated all interest payment for 3 options but didn’t do the loss calculation! sugar…
Q3 so many tricks in this question, inflation calculation for sales and other costs, TP tax deductible in the sub’s CF calculation, but it need to be taxed by 25% when computing the parent’s CF, PBT from sub need to be taxed by extra 10%, loss of contribution due to setting up operation in BXXXland need to be taken into account, and on top of all these a few thing need to be translated into $ from Rupee…so time consuming! How can one do a big question like this within 45min?! I ran out of time on the first part of the question and didn’t even look at the b part….
Q1 the (a) part is 11 marks, after that it was a disaster for me… used FCF growth model to calculate the overall value of D co. I got $140 for the overall company value then I did the post acquisition: P/E*(synergy saving+PAT of D co. ) got $152 for D (maybe) … I must have made a really big mistake on the share price calculation…as I didn’t remove the loan value from the total company value! (anyone help?) Cash flow for Metaxi need to include dividend from Curis after withholding tax as well as an extra 10% tax on Curis PBT…so far here is everything I could possibly record
I praying for a pass after all these days and nights were spent on P4…