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@kanchandhankar said:
I read on open tuitions in a reply by John Moffat .
when we are calculating Wacc on mv , mv of equity effectively already includes the reservesYes, I suppose you are right, it is very logically !
Was my mistake.@jmmyjimmy said:
thanks, my reply was shares as well.i remember section b question about money market vs forward. i had answer around USD 3k…
there was also the question about investors, who behave rationally regarding the news on the company. does anyone remember given options?
I remember choosing D
Something about investor might buy to the news of prospective share price growthOther option were
Good news from company …… ..?
Sorry I don’t remember anything elseThere was other q I think in section b about finding the saving/diff in money mkt hedge n forward hedge “. .?
My forward hedge answer was 12000
N Money mkt 1233***
I chose some option which was like 33***@jmmyjimmy said:
i remember question in section b, like what will be the spot rate in two years.i understand it is necessary to multiply the current spot rate by trading currency inflation (x2) and divide by home currency inflation (x2 as well).
Yes I did that too multiplied twice
@jmmyjimmy said:
thanks, my reply was shares as well.i remember section b question about money market vs forward. i had answer around USD 3k…
there was also the question about investors, who behave rationally regarding the news on the company. does anyone remember given options?
Yes, about 3.177 smth like this.
I chose “the prices will NOT react on the announcements”
(I suppose for the semi-strong market the prices WILL react, and the aim was to choose the incorrect answer; other options I do not remember unfortunately)As usual calculation of cost of equity by dividend growth model. just calculate div growth rate by Gordon formula g=br
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Peso forward rate – 143 ? Other option was 140 and I dont remember what. What were ur answers guys?
Q31, B) discuss the Grant Co dividend policy relevance to its equity market value (10 marks). What did u write for 10 marks? I spoke about the Dividend constant growth, dividend irrelevancy theory n thats it :). I referred also to the D growth calculated in part a and mentioned investor have confidence in this share bla bla bla. What 3 marks max? What did u write guys?
one more question that came to my mind:
what is the purpose of financial management?
Finance Mngt Purpose Is The Actually Part A-G Of Our Syallabus …… Invest Appraisal And WCM , But not Financial Appriasal ……… The Answer Is 1 And 3 Only ……….
I’m the section C question of working out the WACC I only remember have to work the the cost of equity as well as the convertible debt.
There was no other loan note or irredeemable debt, or was there?….
@rajina said:
Finance Mngt Purpose Is The Actually Part A-G Of Our Syallabus …… Invest Appraisal And WCM , But not Financial Appriasal ……… The Answer Is 1 And 3 Only ……….do you remember exact answer options? to my mind, they were:
financing decisions
investment appraisal
wcm10 marks was loads for that dividend policy q, I wrote about the theories signalling effect, clientele, bird in hand and irrelevancy but found it hard to relate to q so no idea if right or wrong.
Forgot to leave out inflation in last q for Npv real rates, raging!
Last q about conflict in stakeholders for 6 marks i thought was v open ended so rambled on so no idea if get marks for the rubbish I came up with!
This my second attempt, I think it was fair paper but I could easily fail again, hopefully not!
Can anybody clearly explain?: Should we choose 10 years or 4 years in NPV question?? and why????
I calculated both nominal and real rates NPV for 10 years.. Nominal NPV was around 84 K(after deduction of 50K investment) and around 74 K in real terms. Dont know correct or not..
@aagshin said:
Can anybody clearly explain?: Should we choose 10 years or 4 years in NPV question?? and why????I calculated both nominal and real rates NPV for 10 years.. Nominal NPV was around 84 K(after deduction of 50K investment) and around 74 K in real terms. Dont know correct or not..
NPV 1-4
adw 1-10
NPV 5+ perpetuityFor question 31, what did you choose between redemption 10 years or convert into 10 shares ?
It’s my first attempt and i found it quite difficult ! i did not even have time to finish the exam, i guess we need more time or i’m not speed enough.
Also, they provide too much unnecessary information and you need to stay focus otherwise you might use information which is not necessary.
I found the MCQ more difficult that the ones i did in BPP… So i’m quite confused.
I’m just starting ACCA, and chose that exam but if i fail i could be demotivated…
Yeah I multiplied original spot by 1+ counter inflation/1+ base ($) inflation^2
Don’t let it demotivate you it’s probably one of the hardest of the F modules to start on in my opinion!
I guess payback was 2. since it was for the other project mentioned in below section in which 400k- 40k was the casf flow at the end of the year 4. Even I had wrongly marked 2.4 as answer but could not help it after marking th answer.
@aagshin said:
Can anybody clearly explain?: Should we choose 10 years or 4 years in NPV question?? and why????I calculated both nominal and real rates NPV for 10 years.. Nominal NPV was around 84 K(after deduction of 50K investment) and around 74 K in real terms. Dont know correct or not..
I have calculated for 4 years only as it was mentioned in the paper that- “There is an ongoing management poilcy of quoting the projects for 4 years.”
And for the part b of the question, I remember studying in BPP that no matter how we calculate the NPV ( using nominal rate and cash flows or using real rate and real cash flows), the answer of NPV will be almost same.
I did NPV for 4 years only. Even I guessed from the bottom lines in question about their policy of 4 years
I remember reading in the question that from 5 years onwards cash flow will be same?
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