*** F9 June 2013 Exam was.. Post your comments ***

I liked the fact that all the questions were really short, so not much reading and looking for the information needed.
I would say a fair questions in general, maybe only some time constraint.
Q3 slowed me down as I was not sure how to get to the saving on finance costs after change of working capital policies.
I recalculated overdraft, but not sure if this is the correct way as I did not come across this type of question earlier.
Any comments here?

<cite>@alatu said:</cite>
I liked the fact that all the questions were really short, so not much reading and looking for the information needed.
I would say a fair questions in general, maybe only some time constraint.
Q3 slowed me down as I was not sure how to get to the saving on finance costs after change of working capital policies.
I recalculated overdraft, but not sure if this is the correct way as I did not come across this type of question earlier.
Any comments here?

yup right the exam was fair indeed but yea Q3 was a bit tricky with the part a, but i managed to write something( might be stupid i dont know :P) but I think it was managable exam I managed to do the exam and wrote a lot extra too and was free 10 mins before the time finished

I thought it was quite easy, but I kind of freaked out… Does anyone know which option was the best (according to EPS)? I thought it was option 3 because the PAT was increasing (net of interest costs and tax) but the no of shares stayed the same.

There was a question which had dividends given under a number of years.. Did anyone calculate the growth as the root of (FV/PV) – 1?

And was the dividend given under option 1 D0 or D1? I took it to be D1. But now I’m thinking it was D0.. 🙁

Oh and was the answer, to the question on foreign currency, a money market hedge?

<cite> @ifrah16 said:</cite>
There was a question which had dividends given under a number of years.. Did anyone calculate the growth as the root of (FV/PV) – 1?

And was the dividend given under option 1 D0 or D1? I took it to be D1. But now I’m thinking it was D0.. 🙁

Oh and was the answer, to the question on foreign currency, a money market hedge?

It was D0 bro i did it that way and got the growth 4%
And the forward maket was almost 294000+( dont know the 0’s figure) and the money market hedge was 296000+( forgot the exact figure) what was yours? I m totally sure this is correct because I am perfect in hedging 😀

Q1 .a. npv using money market terms .
b. difference between money market and real market
c.. two finacial objectives of a listed company

Q2. a.wacc
b.how to use capm to find a project specified cost of capital
c.

Q3,a,operating cycle
b. trade receivables management policy
c.
d. money market or forwad hedge

Q4,a,using dividend to calculate share price
b.affect of the issue new share on eps
c.effect of the debt issue on intrest cover and eps
d.factors considering which finance to choose from bonds . equity finance and

forgot little

the d0 could be calculated simply by dividing the dividend figure given in the extracts in the start of the q by the amount of share

<cite>@yyaasshh said:</cite>
forgot to add bank loan whle computing wacc :'(

nevermind bro it cant be more than 2 marks chill now

<cite> @hasanali95 said:</cite>
Did any one adjust bank loan for tax i.e 4% (1-0.3) ?
As interest is tax allowable?

I did that 😀 are you sure whether its correct or not? :/

was a fair exam for the one who studied really hard and for the examiner off-course .. but a bit lengthy for me .. was not able to finish last question (the theory part) Q1 was simple NPV with inflation and working capital adjustment .. part b was to explain between nominal terms and real terms part c was two financial objectives of a listed company question two was WACC with ordinary shares, irredeemable preference shares , redeemable bonds, and a bank loan with a floating average interest rate .. next parts were theory on CAPM and a project specific rate and systematic risk and financial risk and business risk .. and why cost of equity is expensive thn cost of debt .. question 3 on working capital management with asking effects on operating cycle and current ratio and financing cost with effect of new policy .. second part on receivable management policy .. and foreign exchange risk theory and forward market hedge and money market hedge .. q4 on options of raising 3.2 m and its effects on EPS and valuation .interest cover and dividend yield , and last part on theory on sources of finance
..

<cite>@alatu said:</cite>
I liked the fact that all the questions were really short, so not much reading and looking for the information needed.
I would say a fair questions in general, maybe only some time constraint.
Q3 slowed me down as I was not sure how to get to the saving on finance costs after change of working capital policies.
I recalculated overdraft, but not sure if this is the correct way as I did not come across this type of question earlier.
Any comments here?

Yes since the working capital, sales and cost of sales remained the same, i recalculated the current receivables, inventory and payables for the new policy and since net working capital did not change the overdraft was the balancing item. Then calculated the revised current ratio based on those figures.

<cite> @elikem said:</cite>
well i will say it was a fair and decent ppr. i think i also had 11.2% for wacc. hope to get a pass.of 60+

11.2% for me too 😀

<cite><a href=”https://opentuition.com/members/Lambyang/" rel="nofollow">@Lambyang said:</cite>
1st question wacc 11.6%…am i right?

Depending on which IRR % you worked as it makes a little difference. It’s one of the disadvantages of IRR that conventional cashflows can get different IRR’s. i got 11.2% based in 5% and 3% guesses

when we have answer key for f9? I want to guess how many mark i can have? 50% hopefully