AFM*** ACCA P4 June 2017 Exam was.. Instant Poll and comments ***

@alemodique said: hi all. as usual hard paper p4. no way. the point is that the study text and practise book do not cover enough everything..that s the point. we need to dig in youtube for extra lessona exercises comments.. one question..in q2 or q4 do not remember it was written:DO IGNORE BASIS RISK..what does it mean?

@taxman123 said: no the working capital is 90m USD only in y=o. then it increased some cents per 1 USD of revenue increase and got it back in y4.

@taxman123 said: my mistake, i must have confused it with maybe costs (not in the question, but in answering your question above :P , because sales increased i think by inflation or 25%, cant really remember now and i confuse it with the many past papers i did).

@sprocker said: There is a technical article on the bond calc. A yield curve needed to be obtained from the government bonds. MVs were given together with coupon payments for government bonds for individual years. You needed to calculate the yield for one year first, then use this yield to calculate the yield for second year and so on. For example 105 (MV) = 108 (coupon with principal) * (1/(1+r)). r = 108/105 -1 = 2.9%. This is the yield for year one. Then you needed to calculate yield for year two. For example 103 (MV) = 2 (coupon) * (1/(1+0.029) + 102 (coupon with principal) * (1/(1+r)^2). And so on. I recommend that you read the technical article as it is very well explained in there.

@sprocker said: Weren't the sales given in the question for each year but prior inflation? Don't remember the 25% increase....

@jyacca said: Q1 (A) why acquisition fail and how to ensure acquisition do not fail. (B)(i) estimate Dharma co current value and estimate additional value created from the acquisition. (Ii) estimate number of share exchange for the share exchange offer method. (iii) calculate percentage gain for the cash and share exchange method (iv) discuss the shareholders reaction and state assumption (v) estimate cash available from operations to fund cash payment method (vi) impact of reduction of dividend Q2 (A) calculate the bond value when AA and when BBB (B) Reasons credit rating was downgraded by credit agency (C) impact of the downgrade in credit rating on the ability to raise finance Q3 (A) investment appraisal and assumptions (B) drawbacks of 2 transfer pricing method - 40% contribution and at cost Q4 (A) 3 interest hedge method (B)Advantages and disadvantages of traded option vs OTC options (C) Explain delta hedge + demonstranting how to hedge using that +the impact of increase of 0.1% on the interest rates.

@hoangduchung1903 said: I think the main problem is time pressure, given excessive amount of information in the scenario. We have to rush to finish on time and when we are in a rush, we tend to make mistakes or forget the details. If we were to have 4 or 5 hours to finish 3 questions, it would be easy to get 70-80 marks

@tancw95 said: I thought the question only mentioned first year R 800 m and then increased R 90m each year. Did the question mention the working capital is to increase according to sales? Anyone can confirm it?

@tancw95 said: It's okay, man. ;) For the sales, what I remember is increase by 25% each years(y2-y4), but did not mention to be increase with inflation. What I did is y2 x 1.25 y3 x1.25^2 ... Not sure I am right because it could be understand as x 1.25 every each with no square. This make my npv higher (exactly 777).

@elie1lwin said: Hi! How was free cash flow calculated with growth % ? Do you have to find "r" from the growth formula? I'm really not sure about that part. Please help.