AFM*** December 2024 ACCA AFM exam – Instant Poll and comments ***

'Currency swaps are rarely tested..' yeah OK, only in the June 2024 exam AND this one XD

I got APV, Acquisition and Swap... Acquisition question as a big blunder for me. Probably scored 5 marks out of 25 on that one!

Think I got the same, the acquisition with the cash for shares? Both the swaps and acquisitions were a complete flop for me, at least attempted to do what I could- 4th time sitting and gutted I think I will be sitting again.

I was not ready for swaps

Exam was an unmitigated disaster. Couldn't remember APV at all, same for the acquisition question and then swaps. Was not prepared for the swaps at all. I managed to get some marks in each I think but I would not be surprised if I got single digit/low double digit marks come January. I'm absolutely fuming.

My exam had first question with international NPV (can anyone tell me what they calculated, I had 4.something million positive?) and 10 marker re free trade, single market and customs union. Second question was acquisition share per share offer: valuation and gain. Third had interest rate hedging with collar. Disaster :(

I got the same one as you, international IV appraisal for 50m was a blessing. But I got 2.3m positive. No clue what a single market was though. Equity value question was v nice The hedging question, why do they have to test collars ffs, I gave it go and said that no hedging strategy is the best way forward, futures and collar seemed to give worse rates than if no hedge is done.

The international npv was messy. Honestly too long of a question to do everything correct. Was I to translate the cashflows? I totally forgot which figures were in which currency. I calculated the spot rates for the currency at least. That free trade question was a kick in the guts, why would they test that? I feel like International npv wasn't a big area so to have a 50 mark question on that was unnessary. Seems they try everything for you to fail. They seriously need to assess how much can be done in time allotted. I cant do good quality work for that 50 mark question and still 2 additional questions.

How are you all getting such varied answers for international IA? I got 1.XX something and I am 200% sure I got it right because I have practiced the exact same sum in the exam kit thrice.

I remember the way I answered quite well but can't guarantee I didn't mess up cells/formula. In CL currency I had revenue (units times unit price which was already inflated), minus variable costs (again units times cost per unit inflated at 20%), minus transfer price ($5 per unit inflated at home country inflation 3% and then translated in CL, but not sure this was to be included), minus fixed costs inflated at inflation rate, minus TAD (which i added back after calculating the tax). Tax at 25% on operating flows, TAD added back, working capital (incremental amount only), investment cost in year 1 and scrap value in year 4. That was it for the flows in CL I think. I then translated at FX to dollars and added contribution, deducted fall on contribution for stopping exporting $0.5m annually (not sure that had to be accounted for either), added royalties and calculated tax at 20% on extra flows. Then added to remitted flows and calculated NPV at 13%. Please let me know where I went wrong. Thank you

@Elliot479 For acquisition/company valuation question, did you calculate market value of both companies as share price times number of shares (with Yennock share price calculated using other company PE ratio)? Was it then the sum of earnings plus synergies to get combined earnings and previous PE+10% to arrive at new share price (with 800 + 450/3*2 = 1,100 shares after issue)?

This was my last exam and I am so disheartened - I have sailed through ACCA up til now - never under 70 - and actually really enjoyed this syllabus. But this exam was a kicker. I really think I've failed and it's a huge shock and embarrassment. I can usually tell within 5-10 marks how i've done, and this one, let's just say it's marginal at best. I got customs unions etc and international NPV. 10 marks was a lot for a really specific knowledge area that was unlikely to be much covered as not related to calculations. Then that NPV - I was really unclear what we were meant to do across the foreign and home currencies - which to include in which section. I started doing it all in the lira inc the royalties etc. Then realised the 2nd part of th question was about that, but didn't have time to take these bits back to dollars. Really unsure how I'll do as it was all a big mess and the 5 marks for dollar stuff will be hard to mark for me as all in the wrong currency. Second was the acquisition thing. I got a really unlikely answer so who knows- I must have gone down the wrong track. Third was the hedging. I had a nightmare with the hedges despite having it really down before, somehow it all went out the window. Didn't get the collar at all so that's 1/3 of those marks gone. I just feel like it's one of those exams where because they don't guide you on how to do something, if you go down the wrong track you have potentially no marks at all. Also really pushed for time - no time to 'think through' answers, so much to read, hard to find the information to use in so much text. And then those professional marks seem a bonkers system- I have no idea how they award them when your answers are clearly so wrong.

I totally agree with Esther, That international npv should alone be worth 20 marks easily. Yh we may know how to do it but it's too time consuming and exactly what you said the back and forth had me confused. As I said I cant rmr which amounts were which currencies so I totally messed that up but that question was all over the place. I wonder how they can say everyone had similar exams so the marks should be leveled but I doubt. I admit I have only done one Int NPV question and figured it wasnt a big topic (study hub didnt cover much or topic explainers) but I've seen straight forward npv questions have a better mark weighting than that question.

Just realised that royalties had to be substracted as cost in sub in sub currency and added as income in home country. I just added them as income...so bad...hopefully I will not lose too many marks for that

@maria9186 Yes that’s exactly what I did too! Original was share price times shares using the same P/E ratio. Then combined shares after exchange was 1100, 300 issued to yekkon on top of the original 800. Can’t remember the results too well I think I said morexa had a gain of 4% wealth and yekkon 57% and EPS increased for Yekkon by 115% something like that. As combined earnings were 710 and shares 1100 giving EPS of 0.64/0.65 compared to original yekkon eps of 0.3 Also agree with Esther, the 10 marks on trade practices was insane! With NPV I had the CFs in CL first - revenue minus processor cost, variable cost, royalties, tad, tax loss carried over, add back tad, minus investment and add residual, minus WC and then convert to home currency, minus contribution and royalties income and tax those at home rate then discount it, i didn’t add deduct thr 0.5m I think that might have been the wrong decision. This was my last exam too, think it was the hardest syllabus of the entire thing.

Yeah even I faced the same problem. The acquisition question was very tough

Hey , did how was the hedging question, other than collars anything else like futures options FRA or only collar? I mean in the set which got INt NPV question. And about the valuation qn in that set any similar model qn in kit or prev yr paper?

@Elliott479 Thank you for your reply. It comforts me a little as I also got 57% positive impact in wealth for Yekkon's shareholder (forgot to comment that they would accept the offer as well above the required 20% but maybe other considerations re control or wanting to consider other bidder offer or hoping price would even go higher as other bidder, so 3 easy marks lost there). I also forgot to calculate the change in EPS for Yekkon. I felt so time pressured and wanted to stick with time but also wanted to get as much of the easy marks as quickly as possible as I started with Section B and moved backwards. Also, as soon as I started the exam, I realised that the keyboard was not working and they had to move me to another working station after they tried to fix it. I was so tense that I was nearly in tears and when I could continue with the exam, I was shivering.

Is anyone remembering how many marks were in the competition authority question or how the split of marks was in question 2?

Was it the valuation or hedging question?

@maria9186 10 points for pre- acquisition figures 10 points for post - acquisition 5 points for authority @ can you please share your thoughts about the student tasks in question 3 (particularly the one with forward to hedge unhedged exposure from option - I think, it is not possible, because don't know which direction the underlying security price will move), and how according to you will be split the points from the first part of hedge question. Probably: 5 points for collar 4 points futures 4 points basis 2 points advise which one is best

@ Elliot I got mostly the same results. I have calculated cost synergy by multiplying 27m on P/E 12. Calculated also another revenue synergy from 10% increase in P/E. Total synergy was approximately 1167 m of value. Final results 56% in value and 137% for EPS, 4+/- for Mortexa. 3,6 was the estimate price for Yekkon and 13,2 new PE.

Does anyone remember the breakdown of APV Q1, the electric vans one?

Thanks for responding. Unfortunately I got different questions, Q2 being yekkon co and Q3 was related to forex hedging and had nothing related to ESG.

@DeltaThetha Hey could you say the name of the company asked in your forex qn, how was the marks distribution in that . could you pls say

@xxajxx the split for Osman Mehmed Qn was Estimate the gain for shareholders ( both co) CASH OFFER only - ( 5marks ) How does cash offer funding affect the - gearing - eps of the Osman Co ( 6 marks ) Discuss about shareholders reaction of both Osman Co and Mehmed Co to gain from the cash offer. ( 9 marks ). This is what I remember even though its not exact this may be considered as the overall outlay of the qn

@SAS1SOF @maria9186 hey could you say what is this competition authority , like was it asked in valuation or hedging with collars qn?

cant recall the name, but it had a 17 mark calculation and discussion part centering around forwards,futures and options. Then there was 3 mark discussion part and rest were professional marks

The paper was too long than usual, number one was too long and not worthy 50marks.ACCA should review this exam. There was not time to think or revisit questions.

Anyone sat for the second week AFM after issues in the Friday one.. Just sat it today and section A was really tough ..with bonds .. section B reasonable with divestment and hedging (futures and collars)..