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@llkkjj said:
is their any past exam paper i can refer to which have joint probabilities?Apparently it came up in June 2010… but I have not found it yet.
There is a past paper question on this. It is ZSE and came in the June 2010 examination.
@juliat said:
I think I got something like 6.6% for WACC … I took the same approach in the ‘wordy’ question. I hope for a miracle that I somehow scrape through with 50% pass but it’s very unlikely…I feel the same, unfortunately. Try to stay positive though, you never know
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Nooo….I got 10.67% for WACC. Did you add on the fixed interest loan too? 100m at 10% or something
$100m bank loan with 8%fixed interest.
It should be added in WACC calculations?Yes, for the WACC I added the loan but took off the tax from the interest. Oh no, we’ve all got different answers
@colinjsweetman said:
Nooo….I got 10.67% for WACC. Did you add on the fixed interest loan too? 100m at 10% or somethingDon’t
panic – you might have had a different question 🙂 Yes I did add it, tax adjusted but I don’t think it was 10% … Can’t be sure though to be honest 🙂@suzimw said:
I feel the same, unfortunately. Try to stay positive though, you never knowThank you and same to you 🙂 Fingers crossed very tightly!
I got the WACC question for Moscow Co. & the Lease vs Buy question.
Looking back over Lease vs Buy i’ve definitely messed up in a couple areas of my NPV calculations forgetting to use the post-tax cost of capital instead of pre-tax, but hoping i’ve done enough elsewhere to get the marks.
If my memory serves me right, the WACC answer i got was
Ve – $175m
Vd – Convertible debt – $84m
Vd – Loan – $125mKe – 9.6%
Kd – Convertible debt – 7.5%
Kd – Loan – 6.4%Total WACC came out between 8% & 9% (ish)
It’s a little concerning that everyone has different answers but at least we will score marks for workings, even if we slipped up at any point!
I added the loan but didnt take out the tax from interest 🙁
It was 8% without taking out taxWhat was your market value of equity n cost of equity?
Mv of debt and cost?I think I got 860 for expected value of NPV as well.
And 30% for the most likely outcome
@bg12321 said:
I got the WACC question for Moscow Co. & the Lease vs Buy question.Looking back over Lease vs Buy i’ve definitely messed up in a couple areas of my NPV calculations forgetting to use the post-tax cost of capital instead of pre-tax, but hoping i’ve done enough elsewhere to get the marks.
If my memory serves me right, the WACC answer i got was
Ve – $175m
Vd – Convertible debt – $84m
Vd – Loan – $125mKe – 9.6%
Kd – Convertible debt – 7.5%
Kd – Loan – 6.4%Total WACC came out between 8% & 9% (ish)
It’s a little concerning that everyone has different answers but at least we will score marks for workings, even if we slipped up at any point!
The WACC figures look familiar, I hope I just messed up in adding up rather than the method… can you remember your growth at all?
@kanchandhankar said:
I had section Cgrout co…. lease v buy (DCF) and Moscow Co … WACC
Same here
What did you do/write for option 1 and option 2 question in section C. It was about buying and lease of machine and I wrote I would recommend machine to be leased from £520K per year.
Section B
Dollor to sibling or something like that14 sibling future rate
14.13
14.11
13.88
Don’t remembered the last option.My answer was14.13 guessed
10m Treasury sell now 9.6m buy back 9.65m after 50days
What is annual interest.?
I knew how to calculate but on my some stupid figure came up.
@bg12321 said:
I got the WACC question for Moscow Co. & the Lease vs Buy question.Looking back over Lease vs Buy i’ve definitely messed up in a couple areas of my NPV calculations forgetting to use the post-tax cost of capital instead of pre-tax, but hoping i’ve done enough elsewhere to get the marks.
If my memory serves me right, the WACC answer i got was
Ve – $175m
Vd – Convertible debt – $84m
Vd – Loan – $125mKe – 9.6%
Kd – Convertible debt – 7.5%
Kd – Loan – 6.4%Total WACC came out between 8% & 9% (ish)
It’s a little concerning that everyone has different answers but at least we will score marks for workings, even if we slipped up at any point!
Mine were on similar line
Ve – $175m
Vd – Convertible debt – $84m(it was convertible what did u about share value which was higher option?)
Vd – bank Loan – $100 it was $100 in the questionKe – mine was 10.4 (i calculated dividend growth of 3.6 and dividend valuation model to find cost of equity)
Kd – Convertible debt – 6.1% (IRR i think m wrong here)
Kd – Loan – 8 forgot to take out tax 🙁Total WACC came out between 8%(ish) as well
@juliat said:
The WACC figures look familiar, I hope I just messed up in adding up rather than the method… can you remember your growth at all?I think i got 2.89% for the growth rate using the historic growth model.
Yep fingers crossed one of us just messed up on some arithmetic and scores almost full on the calculation itself!
@sulli said:
Section B
Dollor to sibling or something like that14 sibling future rate
14.13
14.11
13.88
Don’t remembered the last option.My answer was14.13 guessed
Yes mine was that as well i think.
Did you take average interest rate? Shilling forward rate for 3 month@sulli said:
What did you do/write for option 1 and option 2 question in section C. It was about buying and lease of machine and I wrote I would recommend machine to be leased from £520K per year.I chose lease option
No penalty for terminations
Machine might become obsolete in 2 or 3 yrs
No maintenance cost@juliat said:
The WACC figures look familiar, I hope I just messed up in adding up rather than the method… can you remember your growth at all?I remember my dividend growth was 3.6 i didnt round it off
Probabilities was very straight forward. Refer to
Open tuition notes. That was easy 6 marks. Looks like we all got different section c. Here in
India we got One section c was probabilities and another one was Debt vs equity finance for business expansion. I felt MCQs were tricky and section C was easy. Except 6 marks for Islamic finance..that was not expected
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