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If I remember correct I put A in mch 1 which it was 11,2 after struggling with roundings. Not sure if its righht at all.
Mcq1 I had A,
NPV was$10608,
Payback 2yr 9m,
WACC….. it said bank loan had variable rate. Doesn’t it mean we need to ignore it?? We can’t apply any rate because it’s variable- my logic.Hi all,
I think I’ve just about recovered from that paper! ? It was a strange one. I feel like I really had to work hard for the 2 marks in some of the MCQ. I got A for no 1, being .60 but I’m not sure if that’s correct. I had to do the other question three times to check my rounding but felt confident with 11.2. I used the cost of the other loan for the variable bank loan, as I felt leaving out the 3m wouldn’t give a true weight of the cost of equity to debt…. but that’ll be a big assumption on my part.
All in all, I’m disappointed that I didn’t get asked the questions I wanted to answer! ? I worked hard to cover ALL of the syllabus but felt like it was concentrated on the same key areas, giving them twists to increase difficulty.
I learnt a lot from it though and I’ll be better prepared for the resit in December! ??
I know how you feel Carly – I thought I’d covered all bases but the MCQs were so tricky. I also got 0.6 and 11.2 in those questions but left out the bank loan as an assumption! I can’t wait to see the back of F9….whenever that is!
Payback period I found 2,74 and something in years so it looks like 2 years and 9 months. If was one mch and I choose A for aggressive. Although again im not sure.And something I just think….. If you find the corect payback period (2 marks) that means that your npv calculations MUST be right??????!!
The first 15 MCQs like WHAT ON EARTH!!!
Also I think I spent about 20 mins of the exam just literally staring at ‘bank loan has a variable int cost’ – paralysed and my brain completely froze decided to completely ignore its weighting % even though I included its market value to calculate the restDemetrius, I went for conservative in that MCQ and if DPP is right your NPV has to be.
Thanks gdjames. I focused on the 2 X 20 marks questions and only 45 minutes in mch as i noticed Tha they were hard and no worth 10 or 15 minutes for 2 marks………
That was wise by you. I worked through it in order and barely finished it cause of the MCQs. Oh well!
Try to remember mch as in my personal opinion were harder than written part….I found in one mch about mv of share capital 312. I think it was question 15.pls guys remmber as those are all or nothing.
Oh I chose aggressive approach in mqc too.
It was a tricky paper. By 12pm I had such a mix of formulas and info in my head, i waisted so much time on mcq, I didn’t have enough time to written and.I also ignored loan in wacc…. It was variable cost…… In bpp kit I was not see a loan (as this if you are given the cost) is ready. I mean its not like loan notes……
I went for conservative, i remember totting up assets and liabilities, they both came to 15m so I figured it’d be as good a guess as any.
The MCQ about Fisher formula, I picked the answer that was something like it deals with different exchange rates and changing interest rates……
i think for the factoring of receivables I went for :
Existing cost: 5m*4%=200k
Factor cost: Admin =10k
Adv 5m*80%*6% = 240k
Remain 1m*4%. = 40k= increase cost of 90,000 for using factor.
I know it’s not the usual way of calculating but it wasn’t asked the normal way. It’s so hard to think when you’re under pressure. When they didn’t state any days it threw me.
It was a mch about a goverment….. I picked goverment to devalued its currency for growing its market…….???????
This is what i found:
asset beta = equity beta / (1+(1-taxrate)*(debt/equity ratio))
I assumed asset beta to be equity beta, so i was wrong.
I remembered there was one question on profitability index in section b. i got 0.6 i think. wonder what the other got.
Asset beta of proxy company- 1.4 (gearing 1:2)
Our company is fully equity finaned
Market risk – 4%
Premium -7%
What’s the cost of equityMCQ Questions I wasn’t sure on:
Value of rights – I always get confused about which is the TERP and ex market etc price but I chose $0.72
Interest Collar – Is the answer to buy interest cap and floor D or the statement C?
The lead exchange rate is higher than the forward but by what figure? I chose D, $28,something. This was a complete guess though as my mind went blank.
Job of the Money Market in terms of letter of credit – I put to accept it as it is issued by the bank as a guarantee no?
Price to earnings ratio question – Think i chose to x by PBIT something like that
Use of factor savings I just guessed $110k.
Economic risk due to the demand of products falling?
I’m sure i’ll thinking of more later..!
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