*** ACCA F9 March 2017 Exam was.. Instant Poll and comments ***

@aqillos said:
regarding quesrion 5 I remember got 3836, but do not remember whether it was in option A or B.

I have looked at exam kit in relation to shareholder return. there was dividend declared, not paid. I considered dividend paid and got 22 %. hope it will not be mistake.

If I am not wrong remember, option related to transaction risk mentioned accounts… something like this… I think it is translation risk… that’s why I chosed economic risk…

Answer for TSR is option A. Always chose dividend paid over declared as it isn’t guaranteed payment.

I am reading a bit everywhere that dividend must be paid in the period taken into consideration

i too thought there were too many questions on part G

@aminb001 said:
Dividend paid is always considered. Check open tuition notes, all questions on TSR include dividend paid.

Q1 was about corporate governance. Answer was option C. A is a close second but it is wrong.

I don’t know if this is Mike or John (or anyone affiliated with Opentuition) but they do have the username “Opentuition Team” but they answered that the dividends declared are included in the TSR, at this link:

https://opentuition.com/topic/f9-questions/

I was just wonder if people included the Fixed Costs in the NPV question?

I can’t remember how the question was worded but I think it didn’t state if the Fixed Costs were incremental or not, they just said the fixed costs were nominal.

I included them because in the practice questions I’ve done, whenever there are fixed costs that need to be ignored we are told what the “incremental” part is, so I know to just include the incremental part and ignore the non-incremental. However in this question it just stated fixed costs so I was unsure if they were project specific fixed costs or not.

@gawcram said:
Yes I included fc
Do u remember the answer for the wacc calculation?
Is it 14.7 as I included cost of bank loan aswell

Was this one of the MCQ? About book value WACC I think?

If it was the one that had “reserves”, I included both the reserves and the bank loan yeah.

I think it was equity + reserves plus a bond plus a bank loan right? I just plugged it all into the WACC formula (remembering to add reserves to equity and adjusting for tax the cost of debt).

I can’t remember the answer it gave me though, but I know that’s how I answered it.

@twistedheat said:
Was this one of the MCQ? About book value WACC I think?

If it was the one that had “reserves”, I included both the reserves and the bank loan yeah.

I think it was equity + reserves plus a bond plus a bank loan right? I just plugged it all into the WACC formula (remembering to add reserves to equity and adjusting for tax the cost of debt).

I can’t remember the answer it gave me though, but I know that’s how I answered it.

Yes, it was a McQ
What’s your answer for the EAC mcq? Was it both statements true?
Also the limitations of business valuation??

On dividend paid or declared this is how much I found written in the BPP’s F9 book. It says about dividend paid or received and not declared.

‘The wealth of the shareholders in a company comes from:
– Dividends received
– Market value of the shares
A shareholder’s return on investment is obtained in the form of:
– Dividends received
-Capital gains from increases in the market value of his or her shares
If a company’s shares are traded on a stock market, the wealth of shareholders is increased when the
share price goes up. The price of a company’s shares will go up when the company makes attractive
profits, which it pays out as dividends or re-invests in the business to achieve future profit growth and
dividend growth. However, to increase the share price the company should achieve its attractive profits
without taking business risks and financial risks which worry shareholders.
If there is an increase in earnings and dividends, management can hope for an increase in the share price
too, so that shareholders benefit from both higher revenue (dividends) and also capital gains (higher
share prices). Total shareholder return is a measure which combines the increase in share price and
dividends paid and can be calculated as:
(P1 -Po + D1) /P0
Where P0 is the share price at the beginning of the period
P1 is the share price at the end of period
D1 is the dividend paid
Management should set targets for factors which they can influence directly, such as profits and dividend
growth. A financial objective might be expressed as the aim of increasing profits, earnings per share and
dividend per share by, say, 10% a year for each of the next five years.’

@twistedheat said:
In my opinion, the declared dividends thingy is just like cash vs accruals basis argument.

I think, if I remember the question correctly, the declared dividends were for the year that was in the same time period as the capital growth but paid the next year, where as the paid dividends belonged to the period before but were paid in the same year as the capital growth.

So if you believe that Total Shareholder Return is calculated on cash basis, you would have answered with the dividend received and if you think it should be calculated on accruals basis then you calculate with the declared dividend.

Exactly but this topic apparently was put in the exam without being accurately explained in the study material…

What should be the WACC for investment appraisal in q32b

Man that whole question 31 gave me problems.

I definitely got no marks for the current ratio and overdraft bit. Left me so confused with all the different stuff.

What did people do for 31c? The question about 5 ways of managing receivables. That kinda confused me too. I assume it wanted things like invoice discount and factoring etc but I also wrote about doing aged receivables analysis and creditworthiness etc. Bit all over the place lol.

Did people use 10% for the discount rate for 32b?

Fingers crossed for the pass

In question 31 C I have written Checking new customers from credit ratings, Factoring, Early settlement discounting, Insurance of trade receivables and Advance payment from foreign customers in order to reduce risk of non-payment.

In question 32 I have used 10% Nominal rate. because, nominal rate usually is used after taking account inflation rate, if I am not wrongly remember.