Forums › ACCA Forums › ACCA FM Financial Management Forums › ACCA Paper FM September 2020 Exam was.. Instant Poll and comments
- This topic has 136 replies, 57 voices, and was last updated 4 years ago by abmoeedd.
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- September 11, 2020 at 4:43 pm #585106
It asked about the conversion value.
The loan note was redeemable at a 20% (can’t remember exact number) premium, so I did 120 = 25 x share price. There was no growth rate mentioned for the shares.
So I got $ 4.80 a share.
September 11, 2020 at 4:44 pm #585107I added it back in Year 4, and wrote on the assumption that the project doesn’t continue. The question did not state it, so that’s why I wrote the assumption.
September 11, 2020 at 4:59 pm #585109I am not sure if it was just my own fault for not being better prepared, or if the exam was really difficult.
Section c was relatively ok and any marks I lost their I am happy to admit is due to not having done enough revision and practice. But section a and b seemed extremely difficult…
I doubt I am going to pass this one, but I’ve learnt my lesson now, next time I will work a while lot harder.
September 11, 2020 at 4:59 pm #585110I was so confused what to do with section c working capital with inflation of 3%
September 11, 2020 at 5:09 pm #585114How did people answer the impossible section C question about choosing equity or loan to finance the $15m investment?
September 11, 2020 at 5:11 pm #585115Agreed with you. Section a and b was so hard.. but they made section c easy. I guess this is how they balance the paper.
September 11, 2020 at 5:18 pm #585119Yeah I had 4.80 too
September 11, 2020 at 5:25 pm #5851226%
An after-tax cost of borrowing should be usedSeptember 11, 2020 at 5:26 pm #585123I’m glad it isn’t just me that had no idea
September 11, 2020 at 5:27 pm #585124you are actually right. You use the 6% for both options because the assumption is that the after-tax cost of borrowing should be used for both.
September 11, 2020 at 5:27 pm #585125Section A and B was quite confusing for me, even the non calculations type questions… I think I did fairly in my sections C. I got the long Npv question and the debt /equity finance question. The Npv was okay. My approach for the debt /equity question
Recalculate pbit, interest and pat for. *current statement
*with debt
*with equityFor current statement, with debt, with equity, calculate
*interest cover
*eps
*P/e ratio
*Po
*terp.For debt : compare current po and adjusted po
For equity: compare adjusted po and terp
Also come their interest coverSeptember 11, 2020 at 5:30 pm #585127I saw this question as well. It did not work so I had to further divide my answer by the nominal value and I got an answer. But it is really strange.
September 11, 2020 at 5:34 pm #585128Hi
Does anybody know how to Calculate the sales volume reduction in NPV calculationSeptember 11, 2020 at 5:34 pm #585129I think we were provided with the pre tax cost of the loan. As that’s all they gave us, I used that (minus tax) to get to the discount rate I used for both calculations. This was a hard paper.
September 11, 2020 at 5:38 pm #585130What is Po?
September 11, 2020 at 5:38 pm #585131Working capital? I don’t remember seeing that in my NPV question. Hope it was a different question otherwise that’s a couple marks lost 🙁
September 11, 2020 at 5:39 pm #585132Same here section c was better for me tooo
September 11, 2020 at 5:39 pm #585133Yes I used 6% too
September 11, 2020 at 5:44 pm #585135I also got a negative npv , arnd 300000 something, the equity question was hard I also just did a few workings
September 11, 2020 at 5:44 pm #585136Lol ACCA ehnnnn!! I spent too much time on the 2mrk questions too.. But finger crossed
September 11, 2020 at 5:47 pm #585139What amount did u get ?
September 11, 2020 at 5:49 pm #5851401) NPV: wuth specific inflation, inflation of working capital, TAD (I got negative (minus 54k)), question about recomendation concerning this project,
2) strange task about how to finance project: loan or shares. There were given the last rows from Profit and loss report. So i have calculate % when company use loan ahd how the profit will change in this case. Question about systematic and unsystematic risk.September 11, 2020 at 5:49 pm #585141This question was confusing, I kinda did the same ,calculated the difference betwn profit for the year , as in how it is impacted by increase in finance costs , although the ratios didn’t go to my head, anyways hope I got a few marks , nd did u calculate the theoretical ex rights price for the rights issue ?I think I got $6 .
September 11, 2020 at 5:54 pm #585143I were doing it through the last 10 minuts )))
I counted the profit when the company use loan. We know that the profit before interest and taxes +20% and I got that if conpany do the loan, the profit will be 2k and before the loan it was 8k so it is not a good idea to take the loan.
If the company issue shares the profit will increase as there are not interests.
You?September 11, 2020 at 6:01 pm #585145But shouldn’t you consider the time value and discount it? I used the coupon rate as the cost of debt to discount it. Got 4.55 per share. I spent too much time on that one also -.-
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