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nmenon3 wrote:Yes I did
what was your answer
Did anyone have a question where it asked for the total value of one company based on the P/E of the second?
Market value of second company 3875.00
Eps 0.75First company 100 m 0.50 nominal value shares with profits of 55 m and dividends of 20 million.
I was quite stuck at that question not sure about the answer.
Got this question too! so glad others got a negative too!
Found section B really hard and then a 7 marker in c about ROE on raising $18m rights issue and loan. got stuck
Got this question…I calculated the eps by taking the total profit attributable to shareholders after the payment of the dividend… that is 50 m, cause I the question it is written as this is after paying 20m to the shareholders
I think I got $11 , the market price per shareI think I selected no for that.. wasn’t it something like selecting two options?
Lot of theory in section a and b which required deep knowledge of the text and technical articles but overall it was good and section c was really good too with npv and early discount and factoring question:)
agboolakenny84 wrote:Mine was early discount. Different paper types. Was your NPV in the second theory question positive or negative ?
I got a positive NPV. Did you use the entire fixed costs amount ($45m) or just the incremental ($6m)?
? got Positive NPV ,why you guys reached to negative ? Does anyone remember whole question ? I got positive npv and calculated IRR,PAYBACK, ARR based on CFs of NPV which i considered inflation on sales , variable ,fixed cost , investment and residual value .What else calculations you made and reached to negative ? If it should be negative ,then all my calculations will be nil ?
First i took only factoring option favorable ,then i saw that in settlement discount it says that bad debts fell by 5 % which i didn’t considered in my settlement discount calculations.After corecting it i reached to conclusion that both options are favorable
I took discounted payback ,but i think i made mistake it was asking just payback period
I got positive NPV too but I did the working capital the wrong way round – included it as inflow in Y0 and as negative in Y3….
I also only included fixed costs of 6m every year (not sure that’s correct), which resulted in operating loss in Y3 and hence no tax on profit, which threw me and I think I’ve done something wrong…..
Has anyone got that?I got positive NPV too but I did the working capital the wrong way round – included it as inflow in Y0 and as negative in Y3….
I also only included fixed costs of 6m every year (not sure that’s correct), which resulted in operating loss in Y3 and hence no tax on profit, which threw me and I think I’ve done something wrong…..
Has anyone got that?For those who got a negative npv,I’m talking about a question where we had maintenence cost and admistration cost, followed by a capital rationing question.
Yes the npv was positive there was no tax and working capital changes so it should be positive as u only had to solve the question upto cash flows before tax and apply discounting rate
adamek144 wrote:I got positive NPV too but I did the working capital the wrong way round – included it as inflow in Y0 and as negative in Y3….
I also only included fixed costs of 6m every year (not sure that’s correct), which resulted in operating loss in Y3 and hence no tax on profit, which threw me and I think I’ve done something wrong…..<br>Has anyone got that?I initially got an operating loss in Y3 too and it threw me. The fixed costs are correct. I had to adjust the expected sales volume in Y3 (75% decline from Y2). I initially had about 4,900 units (~19000*0.25) but I had to revise that to about 11,000 units (~19000/1.75) which led to an operating profit.
Section C:
1. Factoring with recourse and early payment discount offered to customer.
2. NPV, IRR, payback period and ROCE.For those who had this exam can they remember the NPV and IRR they got? For the NPV, I got over 13K (cant remember exact figure) and for the IRR I got over 17% (again can’t remember exact percentage)
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