[Parisnan]

Mmmmm i used the 50/50 both for WACC calculation and for Ke (i.e. for calculation of de-geared beta)…. So if you get the same results i suppose that you used 50/50 as well……

[Parisnan]

Right…. I fund 9% the WACC by using this gearing (50/50)….. And if i remember correct i found the Ke at 13%…. Also i used Ke for the valuation of equity under DVM as appropriate discounting factor and WACC for the valuation under FCFF method….. Finally i think that both 3 methods (P/E, DVM & FCFF) gave me an equity valuation for the combined entity of aprox. 1.600 (more specifically all approaches result to a figures between 1.600 – 1.700)…..

[Parisnan]

To tell you the truth I saw that the question did not mention anything about the unhedged portion but I used forward becouse how could have the outcome if I have not hedge the exact amount?
Regarding growth rate actually it was something like 6% (I don’t remember the exact figure) but the question said that this growth rate expected to be increased after the acquisition by 3points (something like this) and that’s why the final figure used in dvm was 10%….
Thanks a lot !!!!

[Parisnan]

Did you use forward on futures and options to cover the un-hedged portion (since no perfect hedge) or just discussed about? And a last question in the q1, and more specifically in the dvm, did you find the growth rate 10% (for the combined entity after the upward adjustment)?
Thanks a lot in advance!!!

[Parisnan]

I did exactly the same….. and if a remeber well i find 13% Ke and 9% WACC (or something like that)…..
Do you remember what was the amount to be received in foreign currency in the Q2 (something like 202m?….)? I remember that the contract size on both futures and options was 5.000.000 and therefore there was not perfect hedge…. Do you remember??

[Parisnan]

Do you remember what was the amount to be received in foreign currency in the Q2 (something like 202m?….)? I remember that the contract size on both futures and options was 5.000.000 and therefore there was not perfect hedge…. Do you remember??

[Parisnan]

Do you remember what was the amount to be received in foreign currency in the Q2 (something like 208m?….)? I remember that the contract size on both futures and options was 5.000.000 and therefore there was not perfect hedge…. Do you remember??

[Parisnan]

Does anyone remember what was the amount to be received in foreign currency in the Q2 (something like 208m?….)? I remember that the contract size on both futures and options was 5.000.000 and therefore there was not perfect hedge…. Does anyone remember and confirm that?

[Parisnan]

In the section C, The question mentioned that the couple has a joint account with savings income of 6,000 but did not specify what percentage belongs to either party. We had to break it down ourselves and consequently assume that 50% (3,000) belongs to Michael and include it in the calculation of the Personal Allowance? thanks in advance !!

[Parisnan]

i agree

[Parisnan]

In section C in the question that we had to populate the excel tables, i did not have enough time to read the question carefully, does the question mentioned that the parent company want to proceed with group relief to the associate?

[Parisnan]

from where does 11.700 arise?

[Author]

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