[Vishal]

Why didnt we Convert the Year 4 perpetuity to Y0. Like the way did in a sum , Cant Co… where they asked about current share price … and mentioned year 3 dividend 0.5 with growth from subsequent year….?

Like if we do the similar way we get ans 29.69 and this is a academic question of my friend she asked for answer i stated 29.69 after similar calculation as Cant Co their answer key was mentioned this answer but there is no explanation.. Thats why asked

[Vishal]

Thanks it was helpful. But good sleep before exam, is not even possible for me.

[Vishal]

Thanks I already read out that PQ magazine.. It was helpful but still i am feeling stressed a bit.

[Vishal]

Just now watched lecture clear ….Sry as I was in Outside and in a rush so that i posted a comment to know the answer earlier…

Just 2 days for exam Can I have a exam tips and recap tips which could help me…?

It would be helpful and appreciated.

[Vishal]

Thanks a lot . Really helpful.

[Vishal]

Thanks that is really helpful..

And one thing, In few questions they came up with the word “effective” they use compound rate…..

And secondly they in some of the question they dont use the term and the question uses simple rate…

So does the word “effective” may be indicator? of choosing the compound rate..

Lastly we dont calculate longer periods value for receivables and payables everything will be on short period ….

And i want your lectures for option and futures
When to excerise option and not… and complete part of derivatives …. could you share the link of one lecture so that i could find the rest in order format to see one by one….

[Vishal]

So in MCQ part if they give option

They will provide option under one method..
Right sir,, so that we can choose ans under one method ..

And i find difficult to point The difference between simple and compound interest… is there any way to find them..? As both look similar

[Vishal]

Thanks ? Ya the three ways would be useful? for calculation if mcq is there maybe helpful if they ask…..

And i had a doubt in traditional view theory

Is there linear relationship between cost of equity and gearing ..???

Is the statement true or false

In study hub they gave true …

But in old question

Which of the statement concerning capital structure is true..?

The answer is business risk assumed to be constant

But also that linear relation ship is in answer..?

I know both are different question

But my doubt if that is true in one situtation as per theory it must be true for the second right..?

[Vishal]

I think scrap value will be taxed not too sure on tax written down value of old machine whether to include or not

30000*30% = 9000

30000-9000= 21000

180-21 = 159

I am not sure on tax written down value of old machine

[Vishal]

It was Mentioned FM Mock exam 1 , year 2022 in pdf..?? And no answer part for the question

[Vishal]

Thanks

[Vishal]

Ok thanks I will take on Ex dividend In these cases …

Sorry to ask this Could you say simple example when to take cum dividend share price as market value..? I am extremely sorry to asking again and again…

But in study hub they had give cost of equity calculation D*(1+g)/P +g

we already got D1 so why did they done D*(1+g) in study hub…?

as per my calculation Cost of equity is 12.16% And you added this one is correct I will go with this one..

[Vishal]

Moreover both the question looks similar so why did they take the value differently..? What’s the specific value
i still didn’t get it..?

And in cost of equity part that doubt ..?

[Vishal]

This question is from study hub

And they Calculated
Cost of equity like = D*(1+g)/P +g

ke is 12.53% so that I came up with this doubt

And in market value part I had a doubt as in open tuition lectures they mentioned the market value is always ex div unless told different

So can I have some example For taking Cum div share price.. as market value..?

As i saw a question in Chegg.com..???

B Company has 10 million 25 cents ordinary shares in issue with a current price of 155 cents cum dividend. An annual dividend of 9 cents has just been proposed. The company earns an accounting rate of return to equity (ROE) of 10% and pays out 40% of the return as dividends. The company also has 13% redeemable loan notes with a normal value of $7 million, trading at $105. They are due to be redeemed at par in 5 years’ time. If the rate of corporation tax is 33%, what is the company’s WACC?

In this question they have taken market value as 155 cents ..?

Can i know the difference between this one and that question on market value part ..?

Also why did they Take ke formula as that..? Cost of equity like = D*(1+g)/P +g in study hub….??

Explain these 2 part it will be helpful

[Author]

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