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So, it was per share or the whole market cap? 😀 cause this makes difference after you use the formula
I remember calculating overall value, then saw they ask per share and thought that the overall value i got was too big for price per share, so divided by the number of shares in the end
@emo777 said:
So, guys, my solution to question 3:1) saving in finance cost: 60-35/360*26500000*0.05 = 92014
2) advance cost: 35/360*0.08*26500000*(0.07-0.05) = 41222
3) cost of factor: 26500000*0.75/100 = 198750
4) bad debt saving: 26500000*0.01*0.7 = 185500
5) 50000 saving in admin costsThats how i got my positive benefit of 87000
Our answers only differ on the bad debt saving. What was the instruction? Thought they said bad debt was reduced by 30%?
If that is the case, you shouldn’t have calculated the new level of bad debts. You should have calculated 30% * .01 * 2,650,000
Hmm, i remember they said bad debts were reduced by 70%.. Thats why i multiplied it by 0.7
No, what you did is you just used gordon growth approximation…they didnt require it thought. And to find market value per share, you just divide market cap by number of shares and vide versa..as Jenny said, max one mark will be lost
@emo777 said:
Jenny, bad debts were reduced by 70%, werent they?Yes, definitely remember 70% reduction in bad debts.
In terms of of the DGM value however it doesn’t matter which method you use to approximate dividend growth – either would be valid. I can’t remember if the info was in the question to use Gordon but, if it was, then the value calculated using that growth would be equally valid.
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Too bad ACCA won’t be uploading Section A for F9. I noticed they only uploaded Section B for F5 and F7. They uploaded section A for F6 as this was the first timw. So we can only deliberate on Section B.
The paper was so tricky that all ideas we thought seemed sensible but only one was correct.
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-I made a mistake on the NPV question,i did not study intensively due to work pressure..so i used average selling price (which i made a mistake in calculating and got $30) and inflated it by 4%..close to $29 ,so i guess i shall only be penalised ounce.ACCA does not penalise you twice for one mistake. At the end i got a positive NPV and made my conclusion based on my figures.
-Factoring-I found it more beneficial to factorise.
-Foward hedging was preferred to money market-Thats what i found.
On the question regarding capital structure,i talked about the company striking a balance between debt and equity,WACC is at it’s minimum at the optimal level.
-Multiple choice question regarding intermediaries,i thought the venture company is not,but after doing a google search,turns out venture companies are intermediaries.I GOT THE SAME RATE OF 30 AFTER INFILATING AND TAKING THE 4% AND YES GOT A POSITIVE NPV OF 2432 OR CLOSE TO THAT
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pension fund
I can not believe i am the only one that got 23 for sales price. Why is my answer different?
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