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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Debt to equity swap and intrinsic value
..hello
Is it enough if only I understand the theory of debt to equity swap ..are calculations also asked ?
What is intrinsic value and how do we calculate it using dividend valuation model
There is no theory being debt to equity swap! It is relevant in a reconstruction when they give debt lenders shares to replace the debt. It is examined as calculations (but is really more of a P2 topic – as you are no doubt aware, all the P level choice exams can examine topics from any of the other P exams.)
Intrinsic value relates to share options and has nothing to do with the dividend valuation model.
Where are you studying from? A study text or my lectures (or both), or by just looking at past exam questions?
There is a question about intrinsic value( or realistic value) in bpp text book as I am using bpp kit n text ..using dividend growth model estimate intrinsic value of company shares .
I cannot explain without seeing the question. I only have the BPP Kit – not the Study Text.
I don’t actually remember the words ‘intrinsic value’ ever having been used in the exam, but it would normally only be in relation to option pricing anyway.
