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Dear Mr John,
I was doing the Dec 2012 question 4 valuation question and in the marking scheme the examiner has predicted future earnings as “In the case of GWW Co, the earnings one year forward could be forecast to be$10·7m (10·1m x 1·059)” How has he got this figure, could you please explain? Where is 1.059 coming from?
Also, one more query – does doing F9 past papers really help the final mark are the question in F9 (especially the written parts) similar and does practicing the written parts from past papers help on the final day? I ask this because I am a self study student who just relies on past papers, particularly the marking guide, I study the examiner’s answers like a textbook because I don’t have any tuition classes nor any study text so I am scared I am under prepared for the finals. All I have in F9 is past papers
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Profit 2009 year = $8.5 and it is grow to year 2012 profit = $10.1 ( grow over 3 year )
8.5(1+g)^3 = 10.1
g = 0.059
or avarage grow 5.9% ( 0.059 x 100% )Year 2013 predict = Year 2012 x ( 100% + 5.9% ) = 10.1 x 1.059 = $10.7
With regard to your first question, what ingo999 has written is correct.
With regard to your other query, the examiner for Paper F9 has stayed the same for a very long time. He has asked most of the written parts of questions that he can possibly ask, and so it is sensible to study his answers like a text book. Remember that he writes more than he expects students to write in the exam (because he knows that people learn from his answers) and so you will not be expected to write as much. Also, do look at the marking schemes as well to see which the important points are that the markers are looking for.
(You say that all you have is past papers – don’t forget that you also have our lectures and Course Notes 🙂 )
Indeed you’re right I have the support of OT – which is wonderful. I understood hedging, which was very well explained by you. Thanks very much for your feedback and reply to my query. It makes a difference to me.
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