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on the factoring question when it came to the 80% did you multiply this by 7% or 2%??
Q1 I chose forward rate agreement. The difference was $870
Q2. forgot to incorporate growth into earnings yield
Q3. It was better not to use the factor because it had a net cost of $19,104
Q4. This one threw me off balance. I first calculated the theoretical ex right price. I then calculated the present PE ratio. This question was rily tricky. You need to remove the issue cost from the amount raised before calculating the nominal value of the bonds that were redeemed. Calculating the nominal value of the redeemed bonds required a rather complex adjustment. The next step is to consider d interest saved and its effect on earnings. The new share price should then be calculated using PE ratio.
Q5. Part A was straightforward. I arrived at a positive NPV of $3,807,000. Anyone with me on this?
@mfc2476 said:
Q20 of MCQ, I think I remember getting $2.10?I got $4.2
I used 2% as there was already a 5% cost of short term finance. Don’t know if this is right or not though.
@addy007 said:
I got $4.2i got 2.10
I did (35% x $25) + (15% x $15) + (50% x $30)
Then inflated it yearly (those figures aren’t exact just showing calcs)
I think there is an NPV Q in BPP that has this, I thought this was the correct way to do it.
@afuyegallas said:
Q1 I chose forward rate agreement. The difference was $870Q2. forgot to incorporate growth into earnings yield
Q3. It was better not to use the factor because it had a net cost of $19,104
Q4. This one threw me off balance. I first calculated the theoretical ex right price. I then calculated the present PE ratio. This question was rily tricky. You need to remove the issue cost from the amount raised before calculating the nominal value of the bonds that were redeemed. Calculating the nominal value of the redeemed bonds required a rather complex adjustment. The next step is to consider d interest saved and its effect on earnings. The new share price should then be calculated using PE ratio.
Q5. Part A was straightforward. I arrived at a positive NPV of $3,807,000. Anyone with me on this?
thank goodness , i thought i was the only one with net costs in factor question , 🙂
Dont agree with you on question 3. Regarding question 4, multiple net proceeds from right issue by 100 and divide by 104, to find the nominal value of loan that will be redeemed by saving the interst on that nominal value
Venture capital, being one type of institutional investor, is intermediary
the MCQ calculation questions where ok it was the “which sentances are correct” that where a bitch….all i know is i put A for the first 3
Guys, cmon, they copied question 3 from bpp, the factor was viable. I have already explained the calculation earlier. You should have had 26500000*35/360*2%*0.8 to find finance cost on advance
@arman90fy said:
Can anybody remember what this npv on q5 , I had 39….. Something . And tax liability I started from 1st yr. nd tax got fix figure of 375 ?Tax WDA was
1100 spread over the 4 years.what is operational efficiency?
the other two were obvious but I couldn’t figure this out@chloesmudge said:
I did (35% x $25) + (15% x $15) + (50% x $30)Then inflated it yearly (those figures aren’t exact just showing calcs)
I think there is an NPV Q in BPP that has this, I thought this was the correct way to do it.
I did that.
3900 something altogether?
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