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Can’t remember all parts of Q1 question:
1) Sale-off vs MBI (4 pts)
2) Calculations (18 pts)
3) Assumptions (8 pts?)
4) Shareholders rights (8 pts?)
5) Professional marks (4 pts)
and what else? There should be one more question- Topics: 0
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discussion on CEO defense strategy
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this was the most difficult paper that I wrote since starting my ACCA journey.
oh my god..realized my Q3(a) answer was wrong!! The hedging should be sell euro right? I answered buy euro..does anyone know will I get any mark out of the total 13 marks?
SO SAD..@weih said:
oh my god..realized my Q3(a) answer was wrong!! The hedging should be sell euro right? I answered buy euro..does anyone know will I get any mark out of the total 13 marks?
SO SAD..Relax! Even if you didn’t reach the right answer or make the right recommendation, the examiners score you on everything you do… from structure to calculations.
If you’ve manged to show on paper what you were thinking and what your process was then you will only lose a small proportion for not giving the correct answer or recommendation with 100% accuracy.
Bottom line, there are partial marks for everything that you do correctly… if you leave the answer space blank then that’s another story.
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Vasabk, that’s also what I did, got a similar answer so I am glad to see someone else didn’t get 9%.
Where I went wrong was I used the FCF model to calculate the value of the company using the P&L figures plus adjustments to sales, operating profit and WC provide. Everyone seems to have used the PE ratio method.
Over all it was ok. Question 2 was good so I hope I score high there and make up for the rest in the other 2 questions. There were some good theory questions as part C’s and D’s.
Best of luck everyone.
I think in part b the R&D and manufacturing divisions should not be separated as C was to buy the whole company and not an individual division at first. After the acquisition C was going to separate the divisions and the relevant question concerning this was something about whether demerger was better than a sell of
If you did what Jordanlyo said wacc is 9
If you did what Vasabks said wacc is 14We must wait and see what examiner wants…
But both will gain marksThat is why it is said that P4 questions donot have one correct answers(because of different assumptions)
Let us wait…
Jeffrey, bro thats the right thing to do. Atlest that’s what i wanted to do for qs1.
U hav to split btwn those 2 and then add the the other divisions value which u get after adjusting the p.e as stated in the scenior.
Man i screwed this qs.. i didn’t do that. I just forgot or rather didn’t hav confidence.
So i didn’t split, neither did i get the sale value. And further more i didn’t even deduct from the total value the debt value to get the equity value.
So i don’t knw hw much out of 18 will i get.
Then qs 2. Silly mistakes.. man i discounted at the real cost of capital.
I had even inflated the sales and variable cost. For some reason myb bcz i was running out of time.. i didn’t infalte the workign capital and the resale value. And discounted using real cost of capital.
Again I hope the examiner doesn’t penalise me more than 4 or 5 marks man.. otheriwse m doomed.Then qs 3.. silly blunder. Forgot the underhedge in the options.
Oh man ! The theory’s of the exam i didn’t knw alot. Was relying on the calculations.
Now don’t knw what’s gonna happen.
@vasabk said:
I got WACC of approx 14% in Q1
I used the following steps at arriving at this:
1) ungear C’s beta equity to arrive at C asset beta
2) weight asset betas of both companies (C and A) to receive combined asset beta as instructed in question
3) re-gear combined asset beta to arrive at combined equity beta
4) using CAPM receive Ke
5) using pre-tax cost of debt 6% of combined Co receive WACC at approx. 14% (ratio of 40:60 holds after business combination)
6) this WACC was used to discount potential synergy (tax&lay offs)Why so many people here write that they got 9%?
This was the exact thing I did…! Still not sure if its the right way!
@nati said:
https://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/p4/Exam%20docs/d15_hybrid_p4_q.pdfSo… Q1 & Q4 of September 2015, and Q2 & Q3 from December 2015 will be lost forever?
guys does anyone remember answer of que 3 part b that was related to derivatives.i just wrote its defination and and then wrote exchange detivatives and over the the counter
For me, it was very difficult to ascertain what the examiner was asking for, but I wrote something, I do not know if it will be suitable for the examiner. Can you remind me of how many parts question three (3) has, and the mark for each part? I don’t remember.
I messed up the option section for question three (3). It was suppose to be €20.56million multiply by the option rate, not divide. Then to find the number of contracts you divide the €20.56 million by €125000. I divide this 20.56 by the option price and then divide the result€125000. I believe this is incorrect. Additionally, did anyone noticed it is a call option?
Hey gays
as everyone post that in question no 3 we buy or sell future
but according to my thinking we have to calculate lock in rate to calculate the acutal amount
same information like in Past paper risk question Coca
same data is available link in Past paper
https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p4/exampapers/P4-2014-june-q.pdf
same data in this paper Company has to receive
and examiner use Lock in rate
then how can you all candidtes use buy or sell
because there is no spot rate at the transaction dateYeah exactly. Bcz there was no future spot rate.
And just for clarity purposes. I got the lock in rate by deducting the basis from the future’s price. Since my futures price was higher than my current spot rate.
According to my concept, a call is the right t BUY the underlying asset and put is to SELL.
We were receiving € and were in the usa($). The contract was in €.
So therefore you wud only SELL € TO BUY $.
Thus being a PUT option.
Well atlest that what i did.
Muhammad’s, when you are seeking the benefit of an higher rate it is a call and when you are seeking the benefit of a lower rate it is a put
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