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I had the same. what did you do about the hedging? Some of the premiums were missing
I had Q1 APV and adjusted WACC, interest swap, Q2 business valuation Q3 ratio analysis evaluation . AFM morning session
I had the same morning questions but APV and NPV both got positive
Ke 12%For swap I got 4.45% rate
Valuations narrative on hostile takeover was tricky only white nights strategy I identified
What anyone else wrote ?
AFM is no joke. If I get a 50% pass on this paper, I am going to give a testimony at church.
I had the same but NPV got a negative(yes Ke 12%), then calculated APV and even adding tax benefits still gave a negative APV, so not sure if I had messed somewhere. Spent so much time on question A that I then messed up the other 2 questions, did not do ratio analysis on the last one just narrative , I don’t think I passed
What came in the AFM exam:
Q1. APV (21 marks!),discussion on methods of finance (there was info on an interest swap in the exhibit but I just realized now I don’t remember a question on it)
Q2. Ratios, discussion on performance and trends
Q3. Business Valuation with DVM, discussion on takeover defense strategiesWhat I broke my head trying to learn:
Hedging FX and Interest rate risk
Free cash flows to the firm
Reconstruction
Bond Valuations
Real Options
Risk adjusted WACC
International Investment Appraisal
Freaking green finance haha *cries*Was ok interest rate collar with net premium was the hedging, did Q3 ran out of time to get Q2 exam was a bit of a joke to be honest
same ke 12% but negative npv and apv, business valuation, i did the writing part but not the calculation then did ratio analysis question for 30mins, i want to write more but run out of time. i hope i pass but i’l continue my AFM studying after 2 weeks break, just in case i need to retake in dec ??
wished i studied business valutation abit more, there were easy marks i’ve missed (crycry) could be the few marks i need for a pass
I had APV 50 mark question as well. I am kicking myself, I seem to have messed up the ungeared Ke section. I don’t know how, I had done it so many times. My result was 16% for some reason.
Forgot to add back the tax depreciation as well. Don’t think I got the swap right.
I attempted the other 2 questions but probably didn’t do enough for a pass given all the mistakes.
Q1 APV 50 mark question. Calculated negative NPV and APV. There was also a question on marketing director’s comment on business risk, difference between NPV and AVP, SWAP. Q2 ratios, I linked most of these to CEO’s statement. Q3 business valuation, gave me most trouble as I was running out of time.
Delighted Q1 was on interest risk, options collars and swap.
Q2 on acquisition done probably incorrectly but calculated the percentage in gain for shareholders but unfortunately 7 marks left on reverse takeover theory, very disappointing.
Q3 full question on Ratios 10 marks calculations and 10 marks for theory. Strange question.
Just praying for 50%!
All the studies done to then write this paper is ridiculous.Q1 – APV for 21 marks!!! Got NPV and APV negative. KE 12%.
Discussion of difference between APV and NPV and why APV is better. Investment decision.Q2 – BS PL analysis of firm with ratios and trends for 20 marks out of which 10 marks is given for ratios and trends. Also, it was required to identify/state missing information in order to expand the analysis.
Q3 – Acquisition with free cash flow to equity. 2 scenarios from CEO and finance director (CEO seemed to be showing behavioral finance). Maximum amount to be paid to target’s directors. Discussion of 3 strategies against the takeover provided by the directors of the target company (legitimacy and effectiveness) – finding competitor, some kind of questionnaire and legal obstacles by creating a negative assumptions on employees and clients.
Just because no one mentioned about the swap, I got CBBR +1.7% after the swap which ended up being 5.70% .. it was asked to be calculated in the notes paper but not in an actual question. Also the Q2 on cash flow to equity valuation I didn’t not understand so left it blank. Did anyone attempt that?
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I couldn’t attend my AFM exam today due to some technical issues I have exam next week,the paper will be entirely different or similar? does anybody have experience with contingency exam? please reply
Can you elaborate more? This seems like a different paper set, most people got APV
Yes, I got the same answer in swap, 0.3% benefit for each party. The overall APV is still negative after including subsidised loan, bank loan benefit and subsidised loan interest rate benfit.
Has anyone encounter this problem? ‘Sorry, it’s not possible to plan and book exam at this time. Please try again later.’
I believe the exam was really hard
Question number one was an APV calculation for 21 points with a possible interest SWAP and comments on managers view. I got a 12% cost of equity, negative NPV and positive APV after incorporation of subsidised loan finance and tax saving on normal loan interest. At the same time I feel i was not consistent enough – i calculated saving on subs loan versus rate on notmal loan, which was given as 6%, but at the same time SWAP resulted in a decrease of rate to 5.7% and I have caluclated tax saving on interest 5.7%, not 6%.. pehaps subs loan saving should have been calculated as well versus the updated rate (but in this case it would make no sense to discount it at 6%). At the same tine in requirement there was not separate question regarding the rates SWAP which is strange.
Question 2 appeared to be very easy if you knew the Gordons growth model. I have totally forgotten about it and calculated the growth rate based on the given share price and given required investor return (which is not correct I believe). At the same time I dont understand how the marking scheme is working – If i Have failed to calculate correctly the market value of acquired company – all other calculations were based on an incorrect synergy effect of two companies, thus also incorrect. Is it still possible to get there some marks? I hope.
When I arrived to the last question which was the ration question – I have only 25 minutes left which was not enough at all.. I tried to write some of comments on performance, gearing and liquidity and ran out of time. However looks like it was a question with easy marks.
Hope for 50% at least, but at the same time not sure I will get those
I also want to leave a feedback regarding the technical side of the exam. I am sorry, but CBE are awful. Excel in the exam is a total disaster. It is written somewhere that you can’t add rows and columns, thus use Ctrl+x ctrl V to manage the composition of the sheet – but when you do it – all formulas are breaking. You can not freeze cells (F4), you can not review your formulas (F2), you can not select a range of cells and copy the formula inside. I feel like I have lost plenty of time on such not exam related activities, eventhough I have practised such sitting before.
Wish everyone luck!
I experienced similar to Alex during exam , even the SUM function did not work , but on ACCA practice platform it did.
Halfway through exam my laptop massively overheated but invigilator refused to allow a cooling pad although an adviser on the phone said it is allowed .Reported this to exam survey ACCA has sent.
ACCA state they’ d like us to get closer to real life workplace but provide limited excel so instead of focusing on contents abd analysis a finalist is wasting time on small exhibits and non existent formulas
On the face of it , APV and ratios seems like very easy areas , but ratios are extremely time consuming ad the temptation is there to do it 100%.
Valuations question theory part was not in line with syllabus except from the statement about approaching more sympathetic competitor, other two very generic rather than defence strategy specific so I linked to ethics and would be grateful if anyone new what exact strategies these 2 related too
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