*** F9 June 2011 Exam was … Post your comments here and vote in Instant Poll ***

after sitting june f9 attempt,i cam to know 1 thing about f9,its intense n u have to b quick in calculations to save ur time to write down theory requirements……

@alancong said:
WC POLICY I THINK you should talk about the 3 approach for funding: aggressive , conservative moderate ,as different attitude to risk will affect cost of wc.

imho …it asked for 3 different factors

3 different attitude doesn’t mean 3 different factors

I mentioned about smtg unrelated at the very beginning and when time is almost up I realised I misinterpreted the question so I quickly change my last point to the 3 different approach of WC without explaining it further.

and I mention bout interest rate, duration of bond and market condition as the factor which influences market value of the traded bond.

and about the dividend policy, i think they want us to explain accordance to the company in the scenario, not about the theoretical part of the policies alone

@tzxsean said:
imho …it asked for 3 different factors

3 different attitude doesn’t mean 3 different factors

I mentioned about smtg unrelated at the very beginning and when time is almost up I realised I misinterpreted the question so I quickly change my last point to the 3 different approach of WC without explaining it further.

and I mention bout interest rate, duration of bond and market condition as the factor which influences market value of the traded bond.

and about the dividend policy, i think they want us to explain accordance to the company in the scenario, not about the theoretical part of the policies alone

I never had a chance to write much on this one but said that factors could be the risk of the company, based on the credit worthiness and the perception of the market, whether there was economic turmoil such as credit crunch… but thats about it.. 0 marks i imagine!

@05008967 said:
I never had a chance to write much on this one but said that factors could be the risk of the company, based on the credit worthiness and the perception of the market, whether there was economic turmoil such as credit crunch… but thats about it.. 0 marks i imagine!

I said interest rate higher..investor get higher return so higher value for the bond
then duration longer can collect more interest so higher value again. and when market is not gd, investor need higher value to compensate their risk in investing. not sure correct or not. i just simply write watever I can relate

@tzxsean said:
probably i will think of tat if I din wasted my time writing irrelevant answer until last few minutes of exam time I only realised. Just hope for pass. Even the calculation part is not tat easy.

how many marks for discuss facotrs affect mv of bond?

@tzxsean said:
imho …it asked for 3 different factors

3 different attitude doesn’t mean 3 different factors

I mentioned about smtg unrelated at the very beginning and when time is almost up I realised I misinterpreted the question so I quickly change my last point to the 3 different approach of WC without explaining it further.

and I mention bout interest rate, duration of bond and market condition as the factor which influences market value of the traded bond.

and about the dividend policy, i think they want us to explain accordance to the company in the scenario, not about the theoretical part of the policies alone

Working capital policy is influenced by:
-Nature of the business
-Level of activity
-Certainty in supplier’s deliveries
-Operating cycle length
Dang I only got 1 right

MV of the bond, I wrote about the interest rate, required rate of return, PV of future cash flows… hopefully some marks out of it.

The 1 about dividend I wrote bout signalling effect clientele and all those bullshit. Pay or no pay is the same cause of the really bad performance. Then I further bullshit about if there’s a good reason to retain dividend then it might give positive impact on share prices (e.g, there’s a profitable investment)…

Raising finance through debt is a definite no cause the gearing and interest cover was really dangerous already. And then a bit of bullshit about the redemption period for the previous loan was near blablabla.

Raising finance through equity I bullshit about how it would improve gearing, but it is likely nobody would take them up the cause it’s earnings are going down, company failed to hit ROE required, share prices are going down, further share issues will dilute EPS and blablabla…

conclusion, I talked lots of crap in Q3, lmao

After exam I thought this paper is ok to get 50-60 marks but hard to get good passing score. However after discussions here I am finally confused. It was time pressure, due to it maybe wrongly understood some requirements, like question for WC policy formulation. Hope I past, can’t imagine sitting one paper twice.

Hoping to Pass InshaAllah 🙂

@tzxsean said:
@eugeneksc

if u pay, u provide dividend return to shareholders
a lil compensation to them for their capital loss
4get whether i mention this clearly or not

if no pay, the money can be retained for emergency or survival
also can use to invest in project in other sector which has negative correlation
since own industry got problem

but if you pay, the share price will react and drop by the approximate value of dividends paid out, is it not? only thing that is beneficial to the shareholders is that they get some real “cash”, but they’re still losing wealth…

The paper was fair, however you may never know how the marker will mark you paper. I think ACCA should consider reducing to question for F9 to 3. I took me almost 20mins to think and know how the calculated the varibale cost in question 1. I hope and pray i get 50%

lol, i didn’t think about ex div or cum div whatever,
i’m thinking of the consequences of paying or not paying as a whole.
that’s why i hate interpreting, every1 have different interpretation, dang

@alancong said:
pay or not pay both increase shareholder value , the only difference is in different kind of wealth. pay increase wealth now by cash, not pay increase wealth in future by the form of capital gain (i.e share price increase)–this is irrelevance theory.
relevance theory div policy will affect shareholder wealth. using div vluation model (share price will be decided by the future div discounted at shareholder required return) 2 more theories: signalling and cliente effect both prove div policy will affect share pric–ie company value.

The scenario given was the company was constantly performing worse than the previous year (PBIT and PAT was reducing EVERY year)
with constantly reducing PAT, paying the same dividend as last year will be not sustainable…
Share price is reducing every single year as well.
Lol i think i have to stop now and start revising other subjects, thanks for your input anyway :). Hopefully I get a pass

One last question… If I worked out the retained earning for each of the past years wrongly, I would obviously get wrong ROCE, ROE and gearing ratio(though it shouldn’t so different such that it would affect interpretation), would I be penalized for that…? I’m dead on Q3 if I will be penalised.