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hey guys, what is the fiscal risk in Q1 by the way, why I never heard of it in the opentuition lecture? T.T
It looks as if there were different questions for everybody.
Mine was Q1 Lahla unbundling using p/e ratio, fcff. Cash offer and shares for shares, Gain or loss to acquirer and acquiree
Q2 APV – FCFF already provided and investment was $120m – (20m from sale of existing assets, 50m subsidized loan, 30 rights issue etc)
Q3 Hedging receipt using FRA, Currency futures and currency optionsThank u for sharing this like seeing others discuss about money market and interest rate swap and all i was worried.
I got same set of question a you.
So in hedging we had forwad future and option and one theory right.
No currency swap or interest rate hedge etc right.
Q1 was about valuation by means of PE, DIvend Valution, Net Assests and FCF….. Where is requirement came from share for share exchange , or cash offer? and synyergy? i remember it is all about valuation
in Q1 Where is mentioned share for share exchange or cash offer or synenergy ? is is all about PE, NET ASSE, PE AND FCF, SO where is the share offer or cash offer?
may be there are different question , as in Q1 I haven seen the requirement to calculate UNBUNDL VALUATION BY MEANS OF ASSET BASE VALUTION, PE,DIvidend base nd FCF But not seen share for share or cash offer
Found some info, there were two possible Q1’s
A
Q1. Business Valuations – asset & earnings methods. Gain to shareholders based upon two purchase consideration options.B
Q1 Corporate Reconstructions – Calculations of WACC, P/E value & DVM.I had B, unbundling valuations, no share for share or cash offer at all (I was worried when I saw the comment also thought I had missed a huge part of the question)
No cash or share in my Q1 at all.
umairzahoor wrote:in Q1 Where is mentioned share for share exchange or cash offer or synenergy ? is is all about PE, NET ASSE, PE AND FCF, SO where is the share offer or cash offer?
I had same problem. I was so confused about the hedge question because it asked to recommend the BEST method to hedge, well, only forward and market, i thought “compare forward, market, future and option” but ……
okmike wrote:The question was really quite confusing. The hedging of the reciepts and payments. only forward rates and then info on swaps, got me confused as i was expecting more detailed hedging question, I had to scan again repeatedly to make sure there was no futures or options to work on. Or may be i missed it. for the swaps I think i got it. fairly easily confusing i would say
You need to include investment in year 0 in your cash flow, the base npv is negative. Financial impact PV is small amount, so APV is still negative.
pranav96 wrote:how was apv negative.. did you do calc. for tax side effects?
I used the one year forward, which is not expired. Also the hedge is only for US$ not for €. Netting off the $, hedge the balance of $, market hedge gives better deal.
Anonymous wrote:Q1 value the equity in company being unbundled using net assets, PE, FCFF and div valuation model I think 24 marks for those split into 3 8markers. Then 11 marks for discussion on the unbundling I think and 7 marks on theory and then 4 final marks for another theory topic?
Use the one year forward, 3 month forward already expired before transaction date.
dreniba wrote:Yeah we definitely had to use money markets which I am so annoyed about because that was an easy question. For whatever reason, the forward rates confused me. Receipt was due in 4 months yet quotes for forwards were only for three months and one year. So wasnt sure how to do that. I
I missed that 4marks too. Google it and you will understand it could be just english language problem. (It is purely language problem to me)
sunginae1 wrote:hey guys, what is the fiscal risk in Q1 by the way, why I never heard of it in the opentuition lecture? T.T
That’s correct. forward, future and option with theory. No interest rate hedge or currency swap
The question on hedging foreign currency risk – it was a net $ payment. For hedging using forward contracts, I extrapolated and found out the expected forward rate for 4 month expiry. I hope that’s right :/
Your apv was negative or positive. My base case npv was negative but apv was positive
I as feel Q1& Q2 done well but hedging Q3 was a complete disaster on done two-part. Coverage for hedging been restricted to SWAP is unfair too.
Brobs91 wrote:Question stated in the first section it was considering a 600m investment in Rupees. It gave the after tax inflows in the 3rd section.
On Apv q…ok I didn’t notice the 600m…I only notice the rights issues and loan part which make up the initial cost… maybe my bad…
On swap, could you email me at stephenlausw@gmail.com please..I would love to discuss further…if you are ok..no forcing..
You rmb the second part talking about currency swap? Isn’t that related to IR swap as per past year practice? How did you managed to convert IR swap into spot exchange…..I thought IR swap is about paying less interest costs based on lower rates……
Any advice from you is greatly appreciated…
I may fail but I want to know where is my fault so I could prepare better next time…this is my second attempt already with 48% being my previous attempt in Dec 20 session….Thanks!
Brobs91 wrote:Question stated in the first section it was considering a 600m investment in Rupees. It gave the after tax inflows in the 3rd section.
Hi Stephen…..I am sure you will be through…don’t worry bro
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