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LSBF ACCA F9 Exam Tips for June 2016
– Calculating cost of equity using CAPM or dividend valuation model, cost of redeemable debt and bank loan/preference shares. Circumstances under which WACC can be used.
– Calculation of NPV. Discussion question on risk and uncertainty – example – sensitivity analysis and probability distribution.
– Quantity discount (EOQ) and factoring calculations. Discussion of working capital financing and/or investment policies.
– Factors to consider in formulating dividend policy or the effect of a change in dividend policy on share price.
– Valuation of equity using; DVM, P/E ratio and asset basis. Valuation of convertible debt and calculation of conversion premium. Explanation of weak and strong form of efficient market.
– Hedging currency risk using forward contract and money market hedge. Discussion of transaction, economic and translation risk.

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