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FM*** ACCA F9 September 2016 Exam was.. Instant Poll and comments ***
@gtavicecity said: 16 mcq where we had to calculate forwrd rate i think ans was D. 2nd was transaction risk. 3rd one was curency futures. 4 I think None. I chose D. 5th I think A , as options can be used for interest managementWhy did you choose currency futures? My answer was currency swaps as swaps are only for borrowings and the company wanted to hedge it's receipt (if I remember correctly?)
@san28 said: How you calculate for MCQ she are value of convertible to find ... It was 3 % and cost before tax 10% with tax 30 % ... Do we need to deduct tax from both the figures like 2.1 and 7 % ?? I tried doing with 2.1 but didn't work ... Similar question in case too ....I don't incorporate tax into the calculation of market values, as interests are tax deductible only to the company and not to bond holders. Hope you've chosen the right answer anyway :)
Yes ... I agree ... Swap was the right answer ... That's what I think ...
What was the mcq correct answer for the market value of the 3 % convertible loan note?I coudnt get it.
@ch305 said: Due to the fact that a loan note being held by the company was mentioned and I couldn't see any other question using this piece of data I assumed that a currency swap could be used against the interest on this borrowing. So currency swap CAN be used according to me.
@ch305 said: Due to the fact that a loan note being held by the company was mentioned and I couldn't see any other question using this piece of data I assumed that a currency swap could be used against the interest on this borrowing. So currency swap CAN be used according to me.Oh no I could have overlooked this then :( unless the question did specifically ask for hedging the receipt. What did you choose then and why?
10y ago#67In Section C, Q32, NPV Question, it stated that investment as well as WC was at the beginning of the first year of operations so I understood that should go to YR1 instead of YR0, anyone with the same?
For the discount I think I got a saving of £2,000
Current interest saving was 10,000
Revised interest by pay early 5,000
Difference (5,000)
Admin fee. (500)
Discount I think was. 7,500
Saving of 2,000
EOQ I got a saving 8,200 ish
I got a massive NPV on question 32
I got 9.45 for the dividend growth, on the mcq regarding working capital I said dividends were least likely,
Section b Mcq I think on the interest rates I chose 1.566
Found the section A Mcqs difficult
The EOQ questions (A) asked about whether the company sold take the settlement discount offer by the suppliers......why did they give the company credit sales?
@aadjazz said: In Section C, Q32, NPV Question, it stated that investment as well as WC was at the beginning of the first year of operations so I understood that should go to YR1 instead of YR0, anyone with the same?I didn't do it this way, as cash flows that arise at the start of the year should go to Yr0. Only cash flows at the end of the year should go to Yr1.
10y ago#71I can see I just made a silly assumption!
@trevon2020 said: The EOQ questions (A) asked about whether the company sold take the settlement discount offer by the suppliers......why did they give the company credit sales?That was a 'distractor' and unrelated to part A. But i did use that to calculate interest costs and bad debts for part C
@carolita1 said: What was the mcq correct answer for the market value of the 3 % convertible loan note?I coudnt get it.It was the $77 answer, which was the cash option rather than the conversion option
10y ago#74I seem to remember the convertible option was better than the cash, $114 vs $100?
10y ago#75The EOQ saving, do you remember the numbers behind it?
@aadjazz said: I seem to remember the convertible option was better than the cash, $114 vs $100?I got conversion value of $114 too and so conversion will be likely.
i got 15,030 exact figure
Just wanted to make sure I didon't misread the question cos I did that for question A....it was a really tricky questions though
yes i wAS wondering WHY my NPV was so large. I as wondering if i did something wrong mine as 13 mil but i only realised the scrap value at the end so my end figure would be wrong
i got a 5% growth
Mine was also 11000
I think I got about 13 million as well!
When you inflated the value of the shares did you then also discount using the cost of capital %? The conversion would occur in 5 years time so should've been discounted by 5 years.
@accastudent1986 said: When you inflated the value of the shares did you then also discount using the cost of capital %? The conversion would occur in 5 years time so should've been discounted by 5 years.I don't think you need to discount them since the redeemable value in 5 years time is the nominal value. The values can therefore be directly compared
Correct answer is money market hegde lol
Because you can't hedge interest rates and you can only hedge interest payments etc.
So curreny futures, options and forward agreement will hegde interest rate issues
@complicated said: I don't think you need to discount them since the redeemable value in 5 years time is the nominal value. The values can therefore be directly comparedBut the question stated that the market value of the shares were $3.6 each and would grow by 4% per year for 5 years. Therefore the future value would be $3.6 x 1.04^5 but the question requested the current value so you should discount the future value
10y ago#87@accastudent1986 said: When you inflated the value of the shares did you then also discount using the cost of capital %? The conversion would occur in 5 years time so should've been discounted by 5 years.Yes, and so the $100 nominal as both will happen in the future. Basically what I've done was comparing $100 nominal conversion in the future vs value of the shares in the future (around $114), as value of the shares in future will be higher, the will convert at that point, so took that figure and then discount it as part of the whole calculation to bring it to today's money terms. I hope it makes sense.
and it said repayment option would be at par and not the conversion option
Hi hope all well did any one remember anything about MCQ my most answer were C does any one have same? Section B and C were fine speculation part C but part A was really tricky
10y ago#90@accastudent1986 said: and it said repayment option would be at par and not the conversion optionreally? I don't remember that bit, it would seem quite silly considering the conversion option was better in terms of value though.
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