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hi john,
im sitting paper p4 december 2015
i have sat paper f9 in june 2014, iv watched all your p4 lectures and im quite happy with them and i have acquired the latest kaplan revision kit and have started to solve them carefully and diligently and will finish all the question in there before a budgeted time of november 20th.
will that be a perfect preparation for paper p4 cuz im quite nervous about it
thanks
It should be perfect preparation 🙂
Do ask in this forum if you hit any problems along the way.
okay
please correct me where necessary in the following:1) wen we use the free cash flow to calculate the value of a company, any value we get say $6000, means the current market value of equity and the current market value of debt of that same company sum up to $6000
2) The value of a company is equal to the market value of its equity only, the value of debt portion has nothing to do with the value of a company. So in 1 above, if additional information was provided saying the gearing was 60 equity 40 debt then though the free cash flow valuation was $6000, the value of the company is $6000*60%=$3600 which is the market value of equity.( which we can also get by dividing book value of shares worth divided by nominal value of shares times current share price).
3) wen a question says the free cash flow to equity of a company is say 3000, if the 3000 is used in the valuation formula and the value of the company is gotten, the resulting value gotten is the market value of equity only.
Please correct me in any of these statements
hi john,
lammer plc june 06since the 5 month forward rate wasnt given, a calculation of 1.9066*7/2 +1.8901*2/9 =1.9029 was done to estimate the 5 month forward rate.
wats the concept behind this
In future please start a new thread when you are asking about a different topic or question.
You have typed it wrongly it should be 1.9066 x 7/9 (not 7/2)
All that has been done is apportion between the 3 month and the 9 months rate in order to estimate a 5 month rate.
Perhaps a more obvious way of getting the same answer is to write it this way:
1.0966 – 2/9 x (1.9066 – 1.8901) = 1.0929
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