*** P4 June 2015 Exam was.. Instant Poll and comments ***

Question 1 was time consuming. Q2 and Q3 were not so easy. Overall, it was a tough paper.

Third attempt on P4. I will change to P5. This course is time pressured and the volume of calculations involved is killing. I regret doing P4 in the first instance

First question was very long, spent so much time on it, I did account for everything in the NPV part of it apart from the redundancy costs, what did you guys write for assumptions, risks and issues for 17 marks? For assumptions I talked about cost of capital, forecast uncertainty, risks I spoke about fiscal policy, regulatory issues which could arise in the future and also about how government may not accept the royalty / tfr prices so this could effect cash flows and the investment decision and sensitivity analysis is something I recommended. Amongst a few more things. I recommended that they do invest since I had quite a large NPV like $2 million or something. In Q2, I used various company valuation methods such as P/E and DVM, as well as EVA, and ratio analysis. A few showed that the company is a good idea and some that its a bad, I concluded it should maintain its long position, I struggled in the futures and options question, I managed to get the beginning bits correct but ending them was tough. Part b completely threw me, had no idea what to write. I think I failed this one. It was a tough paper.
Especially the red herring with tranching article, what a nightmare.

So much better than last time …. I actually understood the questions asked for a start! Impossible to say if I did well enough to pass as the previous one was such a disaster I just cant tell.

Agree about the Securitization article … very mean of the examiner!

I don’t get what the examiner is trying to test!! Can’t he use smaller numbers for fictitious exchange rates and maybe a table format for all the info he is giving in Q1?? Or is he aiming to have pass rates less than 30%?? Ridiculous…

For question 2 or 3 I think, the one where they asked if you should sell the equity, was there any point in calculating ratios when we weren’t given the industry averages for said ratios??

The Only info I really concentrated on & commented on was how we performed against the industry averages being given; EPS, DPS and Share price I think.

I also commented on our Be versus the industry average…& on how much wealth the shares were providing (div per share + cap gain)

Also we weren’t given PE average so probably no point in calculating for our company as there was nothing to compare it to?

Or maybe I am incorrect, not sure!!

This paper really kinda caught me off guard. Question 1 was ok, although the calculations kill on time. After 15 minutes planning time I was still not sure which questions to pick in section B. Question 2 was kinda odd, having to evaluate whether to sell off the stake in a company yet no consideration was given.

Info in question 2 looked more like it could be used for financial analysis not divestment decision

Q1 – My god that was long, he should have let us use a computer not a calculator for that question. There were 2 options, with alot of number to calculate. I know I made mistake somewhere in the calculations as I ended up with $ 194 million positive NPV (impossible) for options 1 ($200 part/units and $20 million royalty). And not enough time to calculate options 2.
Q2 – Bit confused of what the conclusion should be, my conclusion was that it was not the right time to sell it, as they will get a very low valuation due to the condition of the T&L market and the condition of Oden’s its self in 2015 (decrease of net profit by 50%). Looking at the market ratios, it have some indicators that the market is in a recovering stage (higher share price, higher earnings per share). They should wait for a better time (i.e. better market condition and better performance from Oden).
Q3 – Don’t know what to do, the only mark I can get was from the MBO and the advantage of MBO.

I guess, I’m screwed.

Everytime you go to attend this paper with can do approach ,you end up
getting pressurised with large volume of calcuations that end u up in not being
able to calculate even small issues. Really disgusting. This paper examiner should
be changed and replaced with someone who is got common sense to how to set
up questions. Either the questions is so diffcult that you cant think or the question is doable with millions of calculations. Either way he wants you to fail the exam.CHANGE THE EXAMINER AND REPLACE A ONE THAT HAS GOT BRAIN TO SET UP EXAM QUESTIONS.

1st time doing the paper and overall I thought it was a fair paper. Definitely didn’t get the NPV right and it was time consuming inflating all the costs and revenue.
Assumptions were all the standards things, sales predictions, inflation and exchange rates, discount rate of 12%.
They were a variety of risks i.e political, economic, rep risk

Q2 I did different valuations method, NA, PE and DVM then didn’t know if this was enough so did basic ratio’s gearing, operating margin, trends between how thier shares performed against the industry, concluded they should sell.

Q4 First part was okay, had to find the lock in rate. The second part was a bit confusing but explained how margin accounts work.

Hoping for a pass and to be qualified!

@teddy2tokes, oh, I’m impressed, it was my first attempt as well but I think you did far better than me..(quite well, you may pass) I got lost in the middle of Q1 and now I’m dissapointed.. lost time at the beginning and I knew I had not enough to finish all my calculations.. Generally after so many exams I feel just after the exam if I passed or not 😉

PE for the industry is the price /share in industry / eps.industry. These were given.
Calculating this it showed a PE around 13 14 in all the years.
In our company PE in the last year boost the ratio, around 18 and this was unusual given the poor result.
I have stated that this high PE should be the result of the takeover rummors which conducted to an increase in the share price.
In conclusion , it should sell to benefit.

other opinions?