*** F9 June 2015 Exam was.. Instant Poll and comments ***

In question 4 part A i had two mistakes: i multiplied net cash raised by 100/104, instead of 100/(104*1.05 premium)…and when i got revised total earnings i divided them by old number of shares…though i expect to get marks for the right method and my workings were correct

Yeap, Jamie 🙂 at the end you compare new price with terp to see how it affects shateholders wealth

Jenny, how many marks will i lose on the following, your opinion?

In question 4 part A i had two mistakes: i multiplied net cash raised by 100/104, instead of 100/(104*1.05 premium)…and when i got revised total earnings i divided them by old number of shares…though i expect to get marks for the right method and my workings were correct

@jparker7 said:
Cheers Jenny.

I think the IRR MCQ one I figured out in my workings to be 18% so I went with the option 17.8%, but I know there was also a 17.2% option so not sure :s

I agree with most of the other numerical MCQs, I got 48k with Baumol, but that’s because I used 5% instead of the net 4% so I presume the 57k answer is right.
Q20 was 2.10, the WACC was 8.8%, the exchange q (no gain or loss) was 1.418, 6% percentage growth correction option on one of the first numerical MCQs (option D). 96.94 for the value of the loan note, ROE was the incorrect option on one of the questions (used PBIT instead of Profit after tax and preference share dividends).

NPV in Q5 I got 3,807. Q3, net cost of using factor or around 200-300k but I think I did this wrong. Q2 I was calculating the total values in a and b rather than per share, do you think I will be penalised?

Good luck to all of you! Praying for that 50% mark!

I was beginning to think I was the only person that got $3,807K in NPV. I think you were right in calculating the total value of equity of the company! That’s what the question asked for! You can check BPP text to confirm this.

@emo777 said:
Jenny, how many marks will i lose on the following, your opinion?

In question 4 part A i had two mistakes: i multiplied net cash raised by 100/104, instead of 100/(104*1.05 premium)…and when i got revised total earnings i divided them by old number of shares…though i expect to get marks for the right method and my workings were correct

Probably no more than one mark for each, perhaps less. Until we see the ACCA marking scheme it’s hard to judge but there were only 8 marks available and quite a few calculations needed so some of them might only be worth 1/2.

@emo777 said:
No, but i think they asked for per share! Maybe im wrong though! Cmon, do you expect them to copy the same question from bpp?

I did total value also as I thought it asked ‘what is the value of X Co?’ but I could be wrong. However – Gvtftf is right – questions are never going to be identical – they don’t want people to learn answers, or calculations, parrot fashion, they want to know you understand the underlying principles so will always try to mix it up a bit to test this.

This is fine – it’s just, on this paper, I think they took it to extremes in Section A!!!

@emo777 said:
Jenny, and max one mark will be lost if you calculate total instead of per share and the reverse, right? You mentioned acca marker said smth about this

Exactly, they do try to be fair – so, if parts a and b were worth 5 in total I would guess could still get minimum of 3 for method if the figures were correct – perhaps more.

@emo777 said:
Great,! And finally, the one with borrowers was wrong, right?

If the question said that borrows buy options that was wrong. Borrowers sell options and then buy to close out at the end of the deal. Don’t know what the other options in that question were though to know the overall answer – but that option definitely wrong.

Jenny, i think you mean futures…statement claimed that borrowers buy futures expecting increase in interest rate and sell them later on

@emo777 said:
Jenny, i think you mean futures…statement claimed that borrowers buy futures expecting increase in interest rate and sell them later on

Yep, futures is what I meant. Sorry, head slightly fried as trying (and failing) to forget about F9 and concentrate on F4 for Monday.

@emo777 said:
Good luck on f4!

Thanks!

Thought I was okay on it but haven’t looked at my notes for well over a week as was concentrating on F5 and F9 first so now it feels like I’ve forgotten everything!!

Oh well, got to the stage where I just want to be done with them now. Have run out of steam. Will not do three at the same time again!

No.

No because the after tax discount rate given was stated it was the nominal value (I.e. money terms) and was already inflated.

We had to inflate the selling price of 29 by 4% each year and also the incremental fixed costs by the other perecentage (5% or 6%).

I imagine the main errors made on this question was:

– Inflating the variable costs, we didn’t have to since they were already nominal monetary value.
– Doing the tax in arrears, the question they pay tax in the year the liability arises.
– Doing a balancing allowance for CA, as it was straight line there was no Balancing Allowance.