Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › *** December 2021 ACCA AFM exam – Instant Poll and comments ***
- This topic has 57 replies, 26 voices, and was last updated 2 years ago by Marron26.
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- December 10, 2021 at 9:30 am #643112December 10, 2021 at 3:58 pm #643731
Not a bad paper. Ran out of time
December 10, 2021 at 4:14 pm #643735Does somebody remember any of your answers to crosscheck?
Don’t know if it’s a good idea as nothing can be done now but still…December 10, 2021 at 4:42 pm #6437419am -12pm
Q1 –
Reasons for unsuccessful acquisition and methods for resolving this (in given case)
-Estimation of value per share of target company before acquisition
– Estimation of number of shares to issued against share for share purchase
-Percentage gain for shareholders of each entity
-Likely reactions of shareholders of each entity
-If purchase is made through cash then dividends will be reduced from 50% to 10% how shareholders of acquirer are likely to react to this.Q2 -Benefits of centralised treasury department
Interest rate derivatives, FRA, futures, options, A term *Smoothing* was asked for three marks.Q3 –
-NPV calculation with an option to delay
BSOP input variables
-use of above information
-Why NPV and BSPOP value are different, advise financial officer13 pm – 16 pm
Q1-
Estimate gain to shareholders through cash vs share for share
Method to value individual and combined- FCF
Impact of each offer on financial performance and likely reaction of shares
Ethical issuesQ2-
APV calculation
Advantage of APV
Factors determining credit ratingQ3-
Adv of centralised treasury
Interest rate risk hedge through FRA futures options
Interest rate SmoothingDecember 10, 2021 at 4:59 pm #643748Too close to call. It was mostly direct questions but the first aquisition question was information overload. Could have scored more if I hadn’t kept it for last. The APV and hedging questions were direct but it all hinges on my calculations being error free.
I feel like I’m going to get somewhere between 45 and 55.December 10, 2021 at 5:01 pm #643749I had the same questions. Did you get a negative NPV and APV?
December 10, 2021 at 5:03 pm #643750had the same questions. Did you get a negative NPV and APV?
December 10, 2021 at 5:12 pm #643752Negative NPV of about 3m, positive APV of about 12m is what I got
December 10, 2021 at 5:14 pm #643754Q1 M&A as described above in the thread
Q2 Interest Hedge – FRA, Collars, Futures, smoothing
Q3 NPV/IRR/MIRRhow do you thiink how many marks can be lost if I put Initial investment in NPV calc to Y1 instead of Y0?
December 10, 2021 at 5:17 pm #643755I was expecting a positive APV so thougg I had done something wrong. I discounted the cash flows at 12% and finance costs at 8%.
December 10, 2021 at 5:29 pm #643756For Q2 which hedging did you find give the highest rate?
December 10, 2021 at 5:30 pm #643757I got negative APV. Please tell me you got the same.
December 10, 2021 at 5:31 pm #643758Negative NPV about 13m , negative APV about 2m I think. Did you?
December 10, 2021 at 5:33 pm #643759Forward rate was lowest (good) , options was highest (bad)
December 10, 2021 at 5:33 pm #643760GRA 6.3, futures 6.31 options 6.6. You?
December 10, 2021 at 5:34 pm #643761I also discounted the cash flows at 12% but discounted the APV stuff at 3.2%,did you tax your cash flows?
December 10, 2021 at 5:34 pm #643762But I recommend options as media reported probable reducing rates
December 10, 2021 at 5:35 pm #643764I got the same
December 10, 2021 at 5:35 pm #643765I couldn’t decide between 8% and base rate, but I think both are acceptable. Yes, taxed tax profits abs calculated tax shields
December 10, 2021 at 5:40 pm #643766Yeah both should be acceptable I wish I’d stated that on my paper haha. And I remember on the APV question that the cash flows were already poat tax but who knows anymore
December 10, 2021 at 5:45 pm #643768JakeDoughty wrote:Negative NPV about 13m , negative APV about 2m I think. Did you?
Somewhere in the vicinity I think.
JakeDoughty wrote:GRA 6.3, futures 6.31 options 6.6. You?
FRA fixes the rate at 5 point something right? I hadn’t revised this part well enough.
Futures and options effective interest rate were mightily close, with options slightly worse. I’m probably wrong.December 10, 2021 at 6:11 pm #643778For the interest rates question did we have to exercise the put option? I found that there was a gain on the FRA, futures and options. Not sure if that’s correct though?
December 10, 2021 at 6:12 pm #643779Who got Interest Rate Hedge for Receipt?
Do you remember your answers? Collars/Futures/FRADecember 10, 2021 at 6:13 pm #643780What did you get when calculating the Estimate gain to shareholders through cash vs share for share?
December 10, 2021 at 6:18 pm #643782I had collar. Could not remember exactly but futures>FRA>collar. Futures and FRA is around 4.1-4.2 and collar around 3.7% Did you get the same?
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