Paper P4 Dec 2010 exam was

Hope examiner

@change said:
Re delta hedge – i did more or less the same as you (no. of shares / (delta * multiplier)) so it must have been either I didn’t add/subtract to 0.5 to my table reading (or you didnt?!) or I did something wrong at the BSOP calc.s. > i’m taking it from BSOP and didn’t think we needed put call parity calcs, but some other poster mentioned it elsehwere. I think i’m def wrong about shorting calls tho – that was stupid of me! But hey, its worth 7 marks so prob got 4 anyways.

Re question 2 APV, my results were susp. negative in fairness, that working capital was dragging the whole thing down so yours looks more lkely there. Kudos.

What did you do for the MBO/restructuring valuations tho? Would love to know how you tackled that?

Did you get anything done for q’4 at all? Surely you had a stab at it! Also, was gonna waffle q5 but i figured it would just take up way too much TIME!

For delta value (Q3(a), subtract from 0.5, because it is N(-d1) and it is a share put option.

Part 1(a), all the payable have equal claim over the net realisable value of the assets (as non going concern) and less the redundancy cost of 54m. shareholder get nothing.
2(a) Prepared the Financial position of the Doric Co. after the restructuring, with surplus of cash at bank of $20m, after the capital investment. and also prepared the income position. However, for the value of the company, I suppose to do FCF, which exclude the depreciation. I forgot to exclude the depreciation, but I still use this formula FCFx(1+g)/ke-g to get the value of the firm. Hope the examiner just penalise me 1 mark for this.
Q1(c) need additional fund of $152m..and again income position, just like Q1(b) above.

Q2(a) I guess I got the positive Base case NPV because of the realisation of the project for I guess $16m if I am not mistaken, and also the recovery of the working capital at the 4th years.

Q4 (a) I did some calculation up to the income of the subsidiary before the proposal by T.E, maybe get 3 or 4 marks only..

Later still need to attend P2 exam -.-

It was my first time to sit the paper. its not what i had expected. The paper was too hard. Yes the expected topics such as risk mgt, Investment appraisal, business valuation were there, the main problem was about the way they were set.

Considering past papers set by Bob, i think the new examiner is once than Bob. But anyway they are completely different people. i still hope for that mark that will make me an affiliate God willing.

Wish all my colleagues the best. Lets wait for February when results come.

@murat said:
Q1 on restructuring. How is used the fact that the bondholders will contribute 90 mill cash?
Couldn’t it be understood that they will purchase new bonds for 90 mill?
It probably meant that they will get new shares worth 270 mill paying only 90 mill. But from the text of it the first is also possible. Isnt’t it?

They are not purchasing new bonds…they are converting their existing bonds into equity. Rather than lose more than half of their bond value (unable to recover), by contributing 90m in cash, they are able to convert it into equity, and being a majority shareholder with voting rights and participate in the company’s profit.

Well the paper was too lengthy and required some thinking again. there was no time for this. Generally it looked a fair paper but ver comprehensive. Let the examiner not make the paper too lengthy given the technicalities involved in the ppaer itself. We should keep our fingers crossed

that paper was not fair . am dropping it if i fall. bye shishir malda

Well well,my second shot, I think this guy did a better job but just that the questions were too lenghty as noted by all, However a well prepared student could have gain the 50 mark.

Q1 reconstruction, talking about the different stakeholders great question just time consuming, hey I attempted the damm thing hoping i can score atleast 15 marks, that also depends on what i wrote, you know when you know something, God Lord father have mercy, that was our first question for our study school.

Q2. APV yeahhhhh, did not realise that q2 was APV only after q1 so i rushed it however i think i have 15 marks there too. oh I need 20 marks.

q3 Delta hedge oh no should have learnt it better, or i just not getting the real thing out of this delta hedge, anywyas i attempted it too.

q4 was some dividend scheme somethiong well i did not even read that question that is to tell you how much details

q5 joint ventures in a foreign country, scenario had so may thing to understand and in that time i wote something since under time pressure not sure . well i don’t think i will get 10 marks each for the last 2 question but i tried my best and i think it will be unfair to the examiner if i said the paper was hard OH no compared to lats no no. I was lost in the jungle, didn’t know where to turn, but thia time i had something to write

So in conculding i think the pass mark this time around will be commendable, but i also think he will mark the paper hard.

All i looking for is 50 Sir. Thank you

section A was very time consuming. First question was too long and 2nd have lot of calculationsssssssssssssssssssssssssssssssssssssss.

i think the questions were fairly ok though lenghty and time consuming.the examiner do not expect us to finish everything but at least attempt all and make some senses.averagely ok.i practise past questions and that helped.

good people please advise me.I have always wanted to do P4 but people are scaring me.they are saying that if a lion is here and P4 is here.they would rather go to the lion.my point is how is p4 compared to other papers.I started P5 last week ant to tell the truth i dont feel it at all.I never liked management accounting.At the moment i work in Treasury division in a busy utility company.Please advise