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Dear Mr Moffat,
First of all, I would like to say thank You for everything You do for us!
Thank You very much!Then, I would like to outline some points from suggested answers:
1) in second question Part A, I have calculated the dividends for 2014 and 2015, found growth between them and used it in the model, instead of gordon growth rate..is that ok?
2) regarding question 5, do we need balancing allowance in year 4 when we have straight line method? I remember doing some examples on it, but they did not tell everything about balancing allowance on straight line depreciation :/
3) question 5, 400000 fixed costs are in current terms, so, I think, we should multiply them by 1.1 for year 1?
1) I think that my answer is better (for the reasons I stated) but I think that the examiner will probably allow what you have done.
2) Yes – there is a balancing allowance because the question said that the depreciation was on cost
3) I thought I had inflated them – I will check again 🙂
So, You think that past growth rate is ok? In second question. I prepared using examples from bpp revision kit and they dealt with such a question using past growth rate :/ also I thought they gave us two payout rates on purpose 🙁
Regarding question 5, nothing big to change, just for year 1 400000*1.1 and so on, I suppose 🙂
With regard to (3) – I had made a mistake. Thank you for pointing it out – a corrected answer is being uploaded now.
With regard to the growth rate, BPP are not perfect (I have been teaching F9 for far, far longer than the most of the tutors at BPP 🙂 )
Strictly, it should be the expected growth rate, but as I wrote in my answer, I am sure (from looking at his past comments) that the examiner will allow answers based on the past growth rate as well.
(The problem in real life is as to what investors will base their expectations on 🙂 )I see, Sir! Bad from Bpp 🙂 though we dont have Mr Moffat in our country, so, have to rely on bpp :/ thanks!
And final, say, if i found out market price per share, but forgot to multiply by the number of shares – max one mark lost, according to Your opinion?
Dear Mr. Moffat,
I would like to know if you do a calculation question correctly and redo it incorrectly would the examiner correct only the right one or the last one which is incorrect? Question 1 section B, I don’t know what made me do it over incorrectly.
Usually markers look at everything you do and give marks for the parts that are correct, so don’t worry 🙂
Thank you Mr Moffat, God bless you for all that you do every day… and I think you do alot for us students!
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