Septemer 2015 Exam Questions – Let's re-write the exam Q here!

question 1b, what are the advantages of a centralized treasury department
question 2a, market value of a company using the following approach:
(i) asset based method, most people assumed it was net asset when the question clearly referred to it as asset based method.
(ii) cash flow method
(iii) earnings yield method
2b) what are the disadvantages of using the cash flow method for business valuation purposes.
question 3a) the company wanted to raise $20million through loan notes issues, we were given the current income statement and the statement of financial position and the current industry average for certain ratios, such as operational gearing, interest cover and return on capital employed, there were growth due to inflation for certain items in the income statement such as revenue and cost of sales, all that was required was to redraft the financial statements taking into account the impact of the loan note on the company
3b) the question asked for when a weighted average cost of capital could be used for investment appraisal purposes.
question 5a) advise on whether the company should lease an asset or buy an asset, the question seemed like a replica of the past question named ASOP Co
question 5b) the difference between real and nominal cost of capital

You’re welcome, i hope it’s helpful to us all