June 2025 ACCA Exams

How was your exam? Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

9 KAPLAN REVISION KIT QUESTION 67 CORHIG CO (JUNE 2012 MODIFIED) HELP!!!

This topic has 1 reply, 2 voices, and was last updated 9 years ago by fbawany.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
March 1, 2016 at 11:57 pm #302940
crashog
Participant
- Topics: 3
- Replies: 3
F9 KAPLAN REVISION KIT QUESTION 67 CORHIG CO (JUNE 2012 MODIFIED) HELP!!!
Question 67 – Corhig Co (June 2012 Modified)
Part (b) requires:
Calculate the current cost of equity, using this value, calculate the value of the company using the DVM.
I have looked at the answer but cannot understand how the denominator of 1.12 and 1.123 were arrived at as used in the PV of year 2 and 3 dividend calculation, respectively. Any suggestions please?
March 2, 2016 at 1:23 pm #303015
fbawany
Member
- Topics: 20
- Replies: 171
Hi crashhog,
That is just saying 500,000 / 1.12 / 1.12 – so that ‘2’ and ‘3’ is just for power. Instead is writing it out twice, they have just said, 500,000 / 1.12 (to the power 2 – for 2 years, then to the power 3 for 3 years)
I hope that helps
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.