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A mixed exam. Section C was rather OK
I had one on lease vs buy
Then the other on finance choice – gearing and interest cover.Section A and B was very difficult in my opinion and had some real tricky questions! How did everyone else get on?
I had one lease vs buy and the other one the purpose and the goal of Islamic finance. Agreed about the section A and B, I found 3/4 question very tricky!
I too think section A and B was much harder than expected and subsequently my time management was affected. I think Section C was much easier compared to section B especially.
I had the same paper too. Do you remember which option was correct in section c? I remember choosing the lease option for second question and the right issue over issue of loan notes for the first question.
I had lease vs buy and gearing/interest cover crq in exam.. section C was okay_ish
But section A,B was very difficulty and tricky
I had lease vs buy and gearing/interest cover crq in exam.. section C was okay_ish
But section A,B was very difficulty and tricky
I chose the lease option over buying option.. but i forgot to add the residual value which would bring the buying value down and lower than leasing option
So i think for me, the correct answer was buyingIm gearing, interest cover crq i chose rights issue over loan Notes, debt
Section C was NPV (investment with Fisher calcs, TAD and working capital investment). Second question was WACC/ Islamic finance prohibitions.
Section A and B was horrendous! Foreign Currency, Biz vals and working capital.
Does anyone that got the question about capital rationing remember what the question actually said ? It was for 8 Marks. It didn’t ask about hard or soft rationing.
Hi Kmgrunsell, what was the question that came after NPV calculcation on section c for you ?
ThanksHi Kmgrunsell, Im pretty sure we were not required to use to fisher formula as we had to discount the flows using nominal/actual rate, since the cash flow were all inflating at different rates. Also regarding capital rationing, I believe we had to talk about different types of capital rationing i.e Divisible , non-divisible projects
Hi! It was about what company should do and consider when it has capital rationing
The question was asking which appraisal methods are suitable for capital rationing , in this case i guess you have to describe the DCF AND NPV, and how they relate to divisible and non divisible
it was WACC , redeemable bonds , preference share and ordinary shares , what puzzeled me is that there was no discount for the calculation of IRR did we have to resort to using the IRR formula
Section A and B was typically very challenging , i remember questions of the likes of calculating the current inventory policy , where you had to calculate a buffer , one where you had to analyze the Payback period of different scenario , and the one that talked about the fiscal policy , option 1 of the answers they said increase in public spending , rather it is increase in government spending , more question on asset valuation , risk , and in section B , the working capital question was so challenging , does anyone remember the value of the minority shares , and also payables days which trade payable amount were we using the one on the balance sheet or the closing one .Section C for me was NPV , prohibited acts on Islamic finance , advantages of Lease and Buying , WACC , ordinary shares (CAPM ) , Preference share and redeemable bonds (we were not given a discount factor) and Capital rationing (theory).
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