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tzxsean what did u get for question 1 part b i think it was…asking abt cal npv perpetual succession??
@05008967 said:
I also had (750) in year zero and recovered in year 4. There were no other adjustments to WC required.In the question it was said Director was estimating with four year Horizon, and project was to continued further… so no question of working capital recovery….i think so
Do you remember on the WACC question, when including the bonds did you have these figures…
(250m/250m + 62.4m + 40m)*Ke ?
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@joevassallo said:
I think the answer is yes you need to relaese the full amount in Y4.That’s what I did at least.
but it will go beyond 4yrs
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@joevassallo said:
I think the answer is yes you need to relaese the full amount in Y4.That’s what I did at least.
y did u release it
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in WACC it was (Ke*250)/352.4 + (Kd1*62,4)/352.4 + (kd2*40)/352.4
Least thats what I did…- Topics: 0
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hard, and too much room for interpretation. hope i am in the luck side:)
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@peldor said:
in WACC it was (Ke*250)/352.4 + (Kd1*62,4)/352.4 + (kd2*40)/352.4
Least thats what I did…MV of new debt was 40 mil? I thought that was par value? Im guessing u put 250 mil + 62.4 mil + 40 mil = 352.4 mil? right?
I put market value as sum of future cash flows, that is, interest + redeem value of $105 then discounted using cost of capital 7%. Is that wrong?I think the new MV of bond should be $42, i.e. $40/100*105.
The working capital should be all released in Y4. The continuation after 4 years of the project is for the 2nd part of the question where perpetuity comes into play.
I dont think 7% is correct – the cost of debt for the new bond needs to be worked by the IRR.
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what growth rate was in Q2?
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hi joevassalio, if the MV is $42, did you need to discount the 105 to the redemption date?
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paper was not too bad, the time needed was nearer to 4 hours than 3 in my view, would be happy to get 50% to be honest…
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for growth i did: dividend in 1st yr * (1+g)^n yrs = div in last yr…..cannot remember the exact percent i got.
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Div growth I got 2,98%, rounded it up to 3%
@shane2e said:
hi joevassalio, if the MV is $42, did you need to discount the 105 to the redemption date?
hi shane yes I discounted the $105 to the redemption date 10 years at discount rate. But I used Capital as $100 not sure if I was correct!
Also I worked the growth div as 2.98% rounded to 3% using the past dividends.- Topics: 0
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lack of time hope for 50
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I’m abit confused……why did the examiner say that assume any funds used in hedging must be borrowed, I did include the borrowing interest rate in the money market hedge, but was my error to also apply the borrowing interest rate to the forward hedge making my money market hedge better????
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hope for pass with 50%
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Ran out of time, attempted Q3 on ratio analysis last
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sigh ran out of time too. left a few of the 6,7,8marks theories question blank 🙁 .. and i forgot to recover the working capital for Q1 and got NPV of 713k ..
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someone asked me bout PV of cash flow in perpetuity ?
I just take the cash flow before tax on year 4 and divide with 12%
and minus tax of 30%at first I thought of applying inflation of 3% onto the cash flow but at the end I din’t do it. Should I inflate it?
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can anyone tell me if i wrote in q1c if i wrote irr,npv and profitability index if any is right
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hoping for 50 as well!!!! Might have been disaster for me. not completed Q1 i, ii, Q2 ii, and others attempted but seem answers not complete. Hoping…..
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