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

@syeduzairnaqvi said:
I also chose the same for theory of BF, but in case of NRV and irredeemable preference shares I chose neither 1 nor 2

Do you remember what the statements were?

I did the same.

I also said neither 1 nor 2

@carlyperky said:
I chose Managers as well for BF…. does it have something to do with Myopic management? This is the problem with ACCA they skirt around a lot of details in the technical articles but unless they directly use or quote the terminology used in the articles, it’s hard to know what exactly the question is referring to. It’s frustrating really.

Hi, what values you took to calculate the growth in q31a….I took 2006 dividend as latest and then 2003 for reference?….I think have made a mistake, the latest div should have been the diff b/w ex and cum div price which was for 2007.

@heychi said:
VFM answer: Economy measures Inputs and Effectiveness measures Output. I think that was option B or C. Efficiency is the process (i.e whether the process is efficient or not).

I chose Aggressive approach but I’m not sure this is right. I think they had more of long term liability balance which suggests they’re using that more. So I guess that’s conservative.

What did you pick for the one where you had to work out the forward rate (FEC?) something like that?

How you calculated Ke in q31a

@syeduzairnaqvi said:
How you calculated Ke in q31a

Hi,

To calculate that you needed to find the dividend growth first before using the dividend growth model.

Think there were 4 payments according to the table.

So Dividend growth = cubed root of (the last dividend/first dividend). Think that gave me 1.04..so 4% growth.

Then you times 1.04 with the ex.div amount/market value + 4%. This gave me 11% if i remember correctly..

@heychi said:
Hi,

To calculate that you needed to find the dividend growth first before using the dividend growth model.

Think there were 4 payments according to the table.

So Dividend growth = cubed root of (the last dividend/first dividend). Think that gave me 1.04..so 4% growth.

Then you times 1.04 with the ex.div amount/market value + 4%. This gave me 11% if i remember correctly..

OK….I took 2006 div as latest and 2003 as ref div and then calculated the growth? Then I calculated the Ke by putting the value of 2006 div and then multiplied it with 1+g/MV+g…was it right?

None of the working capital questions came for me. Not even as MCQs, anyway all MCQs were tricky. Long form questions, I got NPV, wacc as calculation. Then more writing in terms of questions like, difference between NPV and IRR, benefit of convertible loan note. For NPV I got something like 2.5 million with initial investment was 5 million. Tricky part was wc required at the end of each year as 5% of sales. Sensitivity was ok with only 3 marks. Variable bank was a problem, no idea how to consider that. Sure shot mcq were, shares sold in secondary market, LC issuance process, repurchase interest rate, market price of loan notes etc.

MCQ 1-got A.
MCQ with exchange rate forecast got option $/EUR1.2654.
MCQ with 2 statements, selected none of them right.
Question about factoring debt got 90k reduction of profit (A?).

Q31. I excluded bank loan from calculation of wacc and added a note that can be ignored as the balance of bank loan represented only 1.6% of capital, impact should not be significant. I think alternatively can make assumption and use Kd for similar type of finance. Just because question stated variable %, did not want to make that assumption.

In calculating div growth used (cum div-ex div), not 20X6 (not sure), growth was 5%.
Got wacc 11 and smth %.
Kd for loan notes was 5 and smth % through IRR.

Q32. NPV was 10-11m. Inflated sales and var costs accordingly and used after tax nominal DF@12%.

Payback ~2yrs 9m.

@davea said:
MCQ 1-got A.
MCQ with exchange rate forecast got option $/EUR1.2654.
MCQ with 2 statements, selected none of them right.
Question about factoring debt got 90k reduction of profit (A?).

Q31. I excluded bank loan from calculation of wacc and added a note that can be ignored as the balance of bank loan represented only 1.6% of capital, impact should not be significant. I think alternatively can make assumption and use Kd for similar type of finance. Just because question stated variable %, did not want to make that assumption.

In calculating div growth used (cum div-ex div), not 20X6 (not sure), growth was 5%.
Got wacc 11 and smth %.
Kd for loan notes was 5 and smth % through IRR.

Q32. NPV was 10-11m. Inflated sales and var costs accordingly and used after tax nominal DF@12%.

Payback ~2yrs 9m.

I think terminal value was 5% of the initial investment if I remember correctly… So we should take 5% of 25mn at the end of 4th year

Reading these comments making me feel uneasy. I just got so confused doing the NPV question and wrote lots of workings and hope to pick something up somewhere. MCQ’s, guessed quite a few but a few nice ones in there. I completely flopped the WACC, I couldn’t think! Not looking forward to results now 🙁

I deducted also dividend for year 20×7.i found g=4.if u know the new dividend then it is definitely relevant with g.However this is only my opinion.I also choose aggressive for financing and in mch with irredemable I choose statement 1 is correct.In my personal opinion irredemable shares can be consider as share capital.Any opinions????? I might be totally wrong ?

1) when project has same capital structure
2) project is a small scale extention of the existing company. So that WACC doesn’t get affected significantly.
3) project should have the same business risk.