*** F9 June 2012 Exam was … Comments and Instant Poll ***

@olaf said:
For question 1 I disregarded fixed costs as there was nothing mentioned about them that they are additional (incremental) fixed costs.
I was wondering about that but all the practise questions I did there was clearly mentioned about FC. Here they seemed to me irrelevant.
Anyway at the end of the day it’s probably 1/2 mark for including them, I stated the comment why I didn’t take them into account….

question 1 stated that fixed cost are relative 2 projrct….

@olaf said:
Exactly that’s why I used 7% for EAC calculation….not sure if it was correct but I was wondering about that as well and finally decided to use 7%.
In my opinion the sentence to ignore taxation and capital allowance was for maintenance costs that if there was not this sentence they would require tax deduction.

I used 12% though. I didnt use the figure there. I dunno how i calculated another set of figures out and stating that the fig must include inflation. This qn really stunned me wif two sets of wacc

@olaf said:
For question 1 I disregarded fixed costs as there was nothing mentioned about them that they are additional (incremental) fixed costs.
I was wondering about that but all the practise questions I did there was clearly mentioned about FC. Here they seemed to me irrelevant.
Anyway at the end of the day it’s probably 1/2 mark for including them, I stated the comment why I didn’t take them into account….

the question did mention it was related to the operation

Test not too bad, Islamic finance new topic so had to be expected,wish i had read the article on ACCA website a couple more times.I suppose the dividend growth model question in Q4 was a matter Of using Yr 2 dividend and then discounting the answer at a year 1 discount ?

@aneelraja said:
Hello everyone,
Too much to write in a short time.20 min left for Q4 and it was a mess in a hurry.
1)which formula of dividend used,what growth rate used.one thing i used was a total dividends in year 2.
2)and one thing i didnt understood was how to find out variance and transaction costs for miller Or model i left this Q.
3)both wacc with the values given no ungearing.used capm for ke value.

1. I used total dividend of years 3. may be the formula will be
1000*1.03 / .12-.03
2. Didnt u see the formula in the last page? requirement was .. a)return point and upper limit.
3. yea I also used camp . current ke may be 12 , and previous years 14. (if im not wrong)
🙁 pray for me .

@alokito said:
1. I used total dividend of years 3. may be the formula will be
1000*1.03 / .12-.03
2. Didnt u see the formula in the last page? requirement was .. a)return point and upper limit.
3. yea I also used camp . current ke may be 12 , and previous years 14. (if im not wrong)
🙁 pray for me .

i did same with you for 1 & 3.. 🙂

4a part dvm was quite simple. we just hav to multiply the total earnings into pe ratio to get the value of company

Q4

For people complaining about no dividends in the current year. Remember the dividend for the 2nd year were given.

And remember that DVM formula in which Do(1+g) = D1

so you were already given the D1 value 😀

Could anyone upload the F9 questions June 2012? I need the marks for each question and for each subquestions.

hmmmmm now im confused
for q1 i did include fixed one and i discounted at7% for the eac calculation.
i think q1 and 2 were actually the easy ones. the question on working cap investment and financing had to do with relating the agressive conservative and matching policies and talking about how this would affect d profitability, liquidity tradeoff basically. over trading q was a give away.
question 3 i only talked about the conflict with relation to the agency prob didnt know wat more to say, mudaraba- i remembered wat it was but cudnt relate it to d q. forward contract was better and pppt was a fair one.
question 4 was some howww…i didnt convert the cost of debt to after tax, pe valuation was 15k and then the main thing was the discussion well i said there had to be an adjustment to the pe ratio …wat else?????

the p/e qn required us to compute the current earnings given the earnings of 3 prior years. earnings thus grew by by the square root of 4300/3000)-1 which gave me about 19.6percent. used that to compute the current earnings and multiplied the earnings by 5 to get the mkt value

Hello Everyone i just want to comment regarding Q.1 for the calculation of npv i used after tax rate of 7 % the reason being that in WACC there r 2 components Ke & Kd in case of Ke there is no tax but in Case of Kd it is tax deductible thus for npv calculation i took 7 % rate after tax…. however in part b asset replacement Qs…
i used 12% the reason being that it explicitly stated that ignore tax & capital allowance….thus i used 12 % before tax so do comment whether it was logical or not….. thanks…..
In Q4 i did make a blunder i took year 3 dividend value & use that in dvm formula & got an utterly ocnfusing figure 1444444… something like that…. but hoefully i might get 2.5/4 as i correctly calculated Ke…..

Oh my God,I used before tax cost of capital for NPV?So my answer is wrong.How many mark will loose?