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Also, in open question 2, i wrote that dividend growth model is useful for valuing minority shareholding, discussed some of the drawbacks and assumptions as well. Regarding the earnings yield, i said that it is the reciprocal of p/e ration, and in the question they used ey of other listed company, i said that , being a listed company as well, they have to use their own ey, because another company can have different operating characteristics
Me too though I added that being listed you would assume that the market is efficient so the market price reflects the company’s value
in question 2 they have asked for advantages for DVM and EY based on the calculated values if we write assumptions and drawbacks will they give marks???
They did not ask to write about advantages specifically. But of course you ill get marks, you gave a relevant answer
Robert, regarding beta of debt, i think it understates financial risk during ungearing, but not during gearing back, as the exam stated
Are there any advantages of earnings yield? If i am mot mistaken, neither bpp nor kaplan gave its advantages, they just gave basic definition
Robert, do you agree that true false question on borrowers buying futures was wrong?
Guys, anyone got share prices of 9.71 using dividend growth model and 10.5 using earnings yield method without growth?
Q1,I got money market like 18K and forward 17K
Q2?forgot
Q3, using factoring
Q4? look like similar calculation
Q5?same figure we getthe project accept or not?forgot which question?got 4million+ ?4320??positive
Mcq
Q4 about the accounting profit can be manipulated?
Q5 about the ROCE was being calculated wrong?
Is that right
Yes, accounting profits are manipulated. And in the next question they calculated return on equity wrongly
Seriously I don’t know how this exam went.
I thought they had calculated ROCE wrong
They talked about some past reserves init. (Which are not included in ROCE)And Q19 it was 8.8
Q20 was 2.10yup you are right i got about 175000 plus of cost extra so factoring is not viable
Q18 I think was about the Beta in which the first statement was wrong.
Correct
They calculated return on equity wrong. Return on equity is net profit divided by equity. They gave it as pbit divided by equity
Roc002, i dont agree with you. Guys, someone remembers what were the figure for credit sales in question 3?
I thought the exam was unfair.
Especially the wording of mcqs wasn’t too clear
I think there was a question about the recourse in which the first statement was wrong
And now with 2nd statement it can be wrong or right depending on which side u look at it from.
Non-recourse than that statement is wrong (efficiency of bad debt)
From recourse perspective that statement is right
I chose to say it was right
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This paper was really difficult. The MCQ were so tough. The theory was confusing and i didn’t expect this from examiner. I thought this paper was changed so that people could atleast be given a chance to pass it. At this rate who will finish ACCA.
Recourse assists in bad debts. And factoring improves the efficiency of receivable management in the company
I didn’t study much.
Too focused on P1 and P2.But still hoping for a pass
Q1 3 5 done good
Q2 and Q4 expecting not many marks from it. Especially Q4.
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