AFM*** ACCA Paper AFM September 2019 Exam was.. Instant Poll and comments ***

How did everybody find the exam?

time constraints!

Was the hedging for 10€m or 20€m I am confused ?

I don't know why examiner keep testing on time management than on knowledge .......

10€

? I remember 24m$ was my answer Seems I consider 20€M

what is the right answer for inherent risks categories ? (frequent and severe) does it relate to topics "accepting " mitigating ,hedging ?

All of these an evidence of becoming confused because all of your concerns are the time !

Yes

Truth is, this exam should be a 4hour paper. No one cares that much about time management in real life.

what is the correct approach of dividends capacity ? (first part of second question) my approach was PBT minus tax minus investments and residual amount is a potential divs ?

It doesn't make sense. ACCA is always trying to turn accounting into rocket science. I could solve all the questions there but there's just no time to write reports afterwards.

I really don't get how they are giving only 3 hrs for this exam. It takes too long to do the APV, we are not using excel to multiple the inflation and rates and presenting them well and cohesively. Q1 took a-lot of time. Q2,3 Were not that hard, however, I could not complete all because of time constraint. Are they testing my knowledge or how fast I can write?

What was the spot and forward rate? Was in range of 2$/€ ?

Anyone who remembers all the questions that came up??

This paper was not difficult apart from not enough time to read the story to apply answers very disappointed. Q1 I thought there has to be something bigger here seemed too simply. What project to anyone go for Dividend capacity any numbers

@aiamakki said: ? I remember 24m$ was my answer Seems I consider 20€M

Yeah I got the same from forward as higher receipts compared to money market

@amajed said: Yeah I got the same from forward as higher receipts compared to money market

So it was in the range of 24 m

Same impression as earlier comments, Q1 took me 2h to complete. It wasn’t difficult but calculations, analysis and report took a lot of time. Hedged 20M, don’t remember seeing 10. Money markets hedge gave me better result though. Also in range of 24Y$. Rushed through questions 2 & 3. I’m hoping for a pass but paper is impossible to complete in time given

@enna87 said: Same impression as earlier comments, Q1 took me 2h to complete. It wasn’t difficult but calculations, analysis and report took a lot of time. Hedged 20M, don’t remember seeing 10. Money markets hedge gave me better result though. Also in range of 24Y$. Rushed through questions 2 & 3. I’m hoping for a pass but paper is impossible to complete in time given

That is true Time should set at least for 4hr for this paper

What project should we choose in q1? What DF used for project Alpha? 10% or we should calculate Ke I ungeared?

10% was given at the base case rate

I hedged €10 using both forward and money market Y$50m was the cost for the investment. The difference from the hedged amount was the amount I used to compute the savings on debt for the financial side effects on the subsidized loan and issued cost.

Not the questions I expected at all. Thought there would be more on interest/foreign exchange, options, swaps something of that nature. For question one I got the forward rate as a higher return than the money market but only marginally. About 26 million for raised by the money with an additional 24 million required for the finance. Think I got the APV component correct, remember doing a practice question that was very similar. Didn't expect the subject matter for 2 & 3, wasn't all that confident on the main technical component but had a go, think I might have recovered marks on the discursive components. One thing I did wonder about question one, did you do much to the Beta project in the initial NPV? From my reading/recollection the cashflows were already discounted, just needed the initial 50m. taken off? Per recollection I got 5100 npv. With Alpha higher. Did wonder if this was correct at the time as both had a positive NPV, from the sample questions I've done on APV they almost all ended up with a negative NPV, but are accepted due to the loan component. Think it will be close to the wire.

Got a negative for Alpha Positive for Beta, I also got 5100 for the NPV

I got the same result as you for Beta . Alpha give the higher NPV Which hedging gave the higher return ? the forward or the money market ? The higher return was 25.9M and the loan was 24M I thought I did something wrong in the calculation of the money market as I ( Invest -convert then Borrow ) instead of ( Borrow -convert -Sell ) The time was very limited , I only solved 1&3 and 2(C) Do you solve Q3 ?

We were receiving €10, so for money market I borrow-covert at spot- then deposit, got a higher rate for the money market than forward rate.

I got a higher npv for beta. Grouped in the working capital for year 1 which was due in advance which pushed it over. Total return was higher on alpha though.

Question 3: Found the value of the two companies separately and combined with synergy. I Used the PE to find the market price of D. Co by inflating the PE of K. Co by 20%. Found the gain for using both cash and share for share option. Found the new value of D. Co shares and K Co by taking the combine company value and divide by total # of shares (new shares included with K Co shares) and apportioned according to their share share holding each held. Some of the bits I remember from my computation.

ACCA seems to care more about money rather than teaching anything. This exam was a joke. Speed of writing test not a knowledge test. This should be minimum 4h exam.