ACCA 2014_D_P4_Ans

ACCA P4考官文章本文由高顿ACCA整理发布，转载请注明出处The aim of this article is to consider both foreign exchange futures and options using real market data. The basics, which have been well examined in the recent past, will be quickly revisited. The article will then consider areas which, in reality, are of significant importance but which, to date, have not been examined to any great extent.FOREIGN EXCHANGE FUTURES – THE BASICSSCENARIOImagine it is 10 July 2014. A UK company has a US$6.65m invoice to pay on 26 August 2014. They are concerned that exchange rate fluctuations could increase the ? cost and, hence, seek to effectively fix the ? cost using exchange traded futures. The current spot rate is $/?1.71110.Research shows that ?/$ futures, where the contract size is denominated in ?, are available on the CME Europe exchange at the following prices:September expiry – 1.71035December expiry – 1.70865The contract size is ?100,000 and the futures are quoted in US$ per ?1.Note:CME Europe is a London based derivatives exchange. It is a wholly owned subsidiary of CME Group, which is one of the world’s leading and most diverse derivatives marketplace, handling (on average) three billion contracts worth about $1 quadrillion annually!SETTING UP THE HEDGE1. Date? – September:The first futures to mature after the expected payment date (transaction date) are chosen. As the expected transaction date is 26 August, the September futures which mature at the end of September will be chosen.2. Buy/Sell? – Sell:As the contract size is denominated in ? and the UK company will be selling ? to buy $ they should sell the futures.3. How many contracts? – 39As the amount to be hedged is in $ it needs to be converted into ? as the contact size is denominated in ?. This conversion will be done using the chosen futures price. Hence, the number of contracts required is: ($6.65m ÷1.71035)/?100,000 ≈ 39.SUMMARYThe company will sell 39 September futures at $/?1.71035.Outcome on 26 August:On 26 August the following was true:Spot rate – $/? 1.65770September futures price – $/?1.65750Actual cost:$6.65m/1.65770 = ?4,011,582Gain/loss on futures:As the exchange rate has moved adversely for the UK company a gain should be expected on the futures hedge.$/?Sell – on 10 July1.71035Buy back – on 26 August(1.65750)Gain0.05285This gain is in terms of $ per ? hedged. Hence, the total gain is:0.05285 x 39 contracts x ?100,000 = $206,115Alternatively, the contract specification for the futures states that the tick size is 0.00001$ and that the tick value is $1. Hence, the total gain could be calculated in the following way:0.05285/0.00001 = 5,285 ticks5,285 ticks x $1 x 39 contracts = $206,115This gain is converted at the spot rate to give a ? gain of:$206,115/1.65770 = ?124,338Total cost:?4,011,582 – ?124,338 = ?3,887,244This total cost is the actual cost less the gain on the futures. It is close to the receipt of ?3,886,389 that the company was originally expecting given the spot rate on 10 July when the hedge was set up. ($6.65m/1.71110). This shows how the hedge has protected the company against an adverse exchange rate move.SUMMARYAll of the above is essential basic knowledge. As the exam is set at a particular point in time you are unlikely to be given the futures price and spot rate on the future transaction date. Hence, an effective rate would need to be calculated using basis. Alternatively, the future spot rate can be assumed to equal the forward rate and then an estimate of the futures price on the transaction date can be calculated using basis. The calculations can then be completed as above.The ability to do this would have earned four marks in the June 2014 Paper P4 exam. Equally, another one or two marks could have been earned for reasonable advice such as the fact that a futures hedge effectively fixes the amount to be paid and that margins will be payable during the lifetime of the hedge. It is some of these areas that we will now explore further.FOREIGN EXCHANGE FUTURES – OTHER ISSUESINITIAL MARGINWhen a futures hedge is set up the market is concerned that the party opening a position by buying or selling futures will not be able to cover any losses that may arise. Hence, the market demands that a deposit is placed into a margin account with the broker being used – this deposit is called the ‘initial margin’.These funds still belong to the party setting up the hedge but are controlled by the broker and can be used if a loss arises. Indeed, the party setting up the hedge will earn interest on the amount held in their account with their broker. The broker in turn keeps a margin account with the exchange so that the exchange is holding sufficient deposits for all the positions held by brok ers’ clients.In the scenario above the CME contract specification for the ?/$ futures states that an initial margin of $1,375 per contract is required.Hence, when setting up the hedge on 10 July the company would have to pay an initial margin of $1,375 x 39 contracts = $53,625 into their margin account. At the current spot rate the ? cost of this would be $53,625/1.71110 = ?31,339.MARKING TO MARKETIn the scenario given above, the gain was worked out in total on the transaction date. In reality, the gain or loss is calculated on a daily basis and credited or debited to the margin account as appropriate. This process is called ‘marking to market’.Hence, having set up the hedge on 10 July a gain or loss will be calculated based on the futures settlement price of $/?1.70925 on 11 July. This can be calculated in the same way as the total gain was calculated:$/?Sell – on 10 July1.71035Settlement price – 11 July(1.70925)Gain 0.00110Gain in ticks – 0.00110/0.00001 = 110Total gain – 110 ticks x $1 x 39 contracts = $4,290This gain would be credited to the margin account taking the balance on this account to $53,625 + $4,290 = $57,915.At the end of the next trading day (Monday 14 July), a similar calculation would be performed:$/?Settlement price – 11 July1.70925Settlement price – 14July(1.70805)Gain0.00120Gain in ticks – 0.00120/0.00001 = 120Total gain – 120 ticks x $1 x 39 contracts = $4,680.This gain would also be credited to the margin account taking the balance on this account to $57,915 + $4,680 = $62,595.Similarly, at the end of the next trading day (15 July), the calculation would be performed again:$/?Settlement price – 14 July1.70805Settlement price – 15July(1.71350)Loss0.00545Loss in ticks – 0.00545/0.00001 = 545Total loss – 545 ticks x $1 x 39 contracts = $21,255.This loss would be debited to the margin account, reducing the balance on this account to $62,595 – $21,255 = $41,340.This process would continue at the end of each trading day until the company chose to close out their position by buying back 39 September futures.MAINTENANCE MARGIN, VARIATION MARGIN AND MARGIN CALLSHaving set up the hedge and paid the initial margin into their margin account with their broker, the company may be required to pay in extra amounts to maintain a suitably large deposit to protect the market from losses the company may incur. The balance on the margin account must not fall below what is called the ‘maintenance margin’. In our scenario, the CME co ntract specification for the ?/$ futures states that a maintenance margin of $1,250 per contract is required. Given that the company is using 39 contracts, this means that the balance on the margin account must not fall below 39 x $1,250 = $48,750.As you can see, this does not present a problem on 11 July or 14 July as gains have been made and the balance on the margin account has risen. However, on 15 July a significant loss is made and the balance on the margin account has been reduced to $41,340, which is below the required minimum level of $48,750.Hence, the company must pay an extra $7,410 ($48,750 – $41,340) into their margin account in order to maintain the hedge. This would have to be paid for at the spot rate prevailing at the time of payment unless the company has sufficient $ available to fund it. When these extra funds are demanded it is called a ‘margin call’. The necessary payment is called a ‘variation margin’.If the company fails to make this payment, then the company no longer has sufficient deposit to maintain the hedge and action will be taken to start closing down the hedge. In this scenario, if the company failed to pay the variation margin the balance on the margin account would remain at $41,340, and given the maintenance margin of $1,250 this is only sufficient to support a hedge of $41,340/$1,250 ≈ 33 contracts. As 39 futures contracts were initially sold, six contracts would be automatically bought back so that the markets exposure to the losses the company could make is reduced to just 33 contracts. Equally, the company will now only have a hedge based on 33 contracts and, given the underlying transaction’s need for 39 contracts, will now be underhedged.Conversely, a company can draw funds from their margin account so long as the balance on the account remains at, or above, the maintenance margin level, which, in this case, is the $48,750 calculated.FOREIGN EXCHANGE OPTIONS – THE BASICSSCENARIOImagine that today is the 30 July 2014. A UK company has a €4.4m rece ipt expected on 26 August 2014. The current spot rate is ?/€0.7915. They are concerned that adverse exchange rate fluctuations could reduce the ? receipt but are keen to benefit if favourable exchange rate fluctuations were toincrease the ? receipt. Hence, they have decided to use €/? exchange traded options to hedge their position.Research shows that €/? options are available on the CME Europe exchange.The contract size is €125,000 and the futures are quoted in ? per €1. The options are American options and, hence, can be exercised at any time up to their maturity date.SETTING UP THE HEDGE1. Date? – September:The available options mature at the end of March, June, September and December. The choice is made in the same way as relevant futures contracts are chosen.2. Calls/Puts? – Puts:As the contract size is denominated in € and the UK company will be selling € to buy ?, they should take the options to sell € for ? – put options.3. Which exercise price? –€/? 0.79250An extr act from the available exercise prices showed the following:Exercise price?/€1 Put premiums?/€10.790000.004650.792500.00585As the company is selling €, it wants the maximum net ? receipt for each € sold. The maximum net receipt is the exercise price minus the premium cost.This is calculated below:Exercise price?/€1 Put premiums?/€1Net receipt?/€10.790000.004650.7900 – 0.00465 = 0.785350.792500.005850.79250 – 0.00585 = 0.78665Hence, the company will choose the 0.79250 exercise price as it gives the maximum net receipt. Alternatively, the outcome for all available exercise prices could be calculated.In the exam, either both rates could be fully evaluated to show which is the better outcome for the organisation or one exercise price could be evaluated, but with a justification for choosing that exercise price over the other.4. How many? – 35This is calculated in a similar way to the calculation of the number of futures. Hence, the number of options required is:€4.4m/€0.125m ≈ 35SUM MARYThe company will buy 35 September put options with an exercise price of 0.79250 ?/Premium to pay –?/€0.00585 x 35 contracts x €125,000 = ?25,594Outcome on 26 August:On 26 August the following was true:Spot rate –?/€ 0.79650As there has been a favourable exchange rate move, the option will be allowed to lapse, the funds will be converted at the spot rate and the company will benefit from the favourable exchange rate move.Hence, €4.4m x 0.79650 = ?3,504,600 will be received. The net recei pt after deducting the premium paid of ?25,594 will be ?3,479,006.Note:Strictly a finance charge should be added to the premium cost as it is paid when the hedge is set up. However, the amount is rarely significant and, hence, it will be ignored in this article.If we assume an adverse exchange rate move had occurred and the spot rate had moved to ?/€ 0.78000, then the options could be exercised and the receipt arising would have been:Receipt€4,400,000Exercise option:Pay – 35 x 125,000(€4,375,000)Receive –4.375m x 0.79250?3,467,188Underhedged amount€25,000Buy ? at spot (?/€ 0.78)(€25,000)?19,5000?3,486,688Deduct premium cost(?25,594)Net receipt – see Note 1?3,461,094Notes:1. This net receipt is effectively the minimum receipt as if the spot rate on 26 August is anything less than the exercise price of ?/€ 0.79250, the options can be exercised and approximately ?3,461,094 will be received. Small changes to this net receipt may occur as the €25,000 underhedged will be converted at t he spot rate prevailing on the 26 August transaction date. Alternatively, the underhedged amount could be hedged on the forward market. This has not been considered here as the underhedged amount is relatively small.2. For simplicity it has been assumed that the options have been exercised. However, as the transaction date is prior to the maturity date of the options the company would in reality sell the options back to the market and thereby benefit from both the intrinsic and time value of the option. By exercising they only benefit from the intrinsic value. Hence, the fact that American options can be exercised at any time up to their maturity date gives them no real benefit over European options, which can only be exercised on the maturity date, so long as the options are tradable in active markets. The exception perhaps is traded equity options where exercising prior to maturity may give the rights to upcoming dividends.SUMMARYMuch of the above is also essential basic knowledge. As the exam is set at a particular point in time, you are unlikely to be given the spot rate on the transaction date. However, the future spot rate can be assumed to equal the forward rate which is likely to be given in the exam. The ability to do this would have earned six marks in the June 2014 Paper P4 exam. Equally, another one or two marks could have been earned for reasonable advice.FOREIGN EXCHANGE OPTIONS – OTHER TERMINOLOGYThis article will now focus on other terminology associated with foreign exchange options and options and risk management generally. All too often students neglect these as they focus their efforts on learning the basic computations required. However, knowledge of them would help students understand the computations better and is essential knowledge if entering into a discussion regarding options.LONG AND SHORT POSITIONSA ‘long position’ is one held if you believe the value of the underlying asset will rise. For instance, if you own shares in a company you have a long position as you presumably believe the shares will rise in value in the future. You are said to be long in that company.A ‘short position’ is one held if you believe the value of the underlying asset will fall. For instance, if you buy options to sell a company’s share s, you have a short position as you would gain if the value of the shares fell. You are said to be short in that company.UNDERLYING POSITIONIn our example above where a UK company was expecting a receipt in €, the company will gain if the € gains in v alue –hence the company is long in €. Equally the company would gain if the ? falls in value – hence, the company is short in ?. This is their ‘underlying position’.To create an effective hedge, the company must create the opposite position. This has been achieved as, within the hedge, put options were purchased. Each of these options gives the company the right to sell €125,000 at the exercise price and buying these options means that the company will gain if the € falls in value. Hence, they are short in €.Therefore, the position taken in the hedge is opposite to the underlying position and, in this way, the risk associated with the underlying position is largely eliminated. However, the premium payable can make this strategy expensive.It is easy to become confused with option terminology. For instance, you may have learnt that the buyer of an option is in a long position and the seller of an option is in a short position. This seems at variance with what has been stated above, where buying the put options makes the company short in €. However, an option buyer is said to be long because they believe that the value of the option itself will rise. The value of put options for € will rise if the € falls in value. Hence, by buying the €/? put opt ions the company is taking a short position in €, but is long the option.HEDGE RATIOThe hedge ratio is the ratio between the change in an option’s theoretical value and the change in the price of the underlying asset. The hedge ratio equals N(d1), which is known as delta. Students should be familiar with N(d1) from their studies of the Black-Scholes option pricing model. What students may not be aware of is that a variant of the Black-Scholes model (the Grabbe variant – which is no longer examinable) can be used to value currency options and, hence, N(d1) or the hedge ratio can also be calculated for currency options.Hence, if we were to assume that the hedge ratio or N(d1) for the €/? exchange traded options used in the example was 0.95 this would mean that any change in the relative values of the underlying currencies would only cause a change in the option value equivalent to 95% of the change in the value of the underlying currencies. Hence, a 0.01€ per ? change in the spot market would only cau se a 0.0095 € per ? change in the option value.This information can be used to provide a better estimate of the number of options the company should use to hedge their position, such that any loss in the spot market is more exactly matched by the gain on the options:Number of options required = amount to hedge/(contract size x hedge ratio)In our example above, the result would be:€4.4m/(€0.125m x 0.95) ≈ 37 optionsCONCLUSIONThis article has revisited some of the basic calculations required for foreign exchange futures and options questions using real market data, and has additionally considered some other key issues and terminology in order to further build knowledge and confidence in this area.William Parrott, freelance tutor and senior FM tutor, MAT Uganda更多ACCA资讯请关注高顿ACCA官网：。

2014年12月ACCA考试《F4公司法与商法》辅导要点十二本文由高顿ACCA整理发布，转载请注明出处11 Discharge, breach of contract and remedies1 Discharge1.1 A contract can be discharged in a number of ways. The method of discharge may amount to a breach of contract and hence give rise to a claim for damages. However, there are other methods of discharging a contract that will not give rise to a breach of contract claim namely discharge by(a) Agreement(b) Performance.1.2 Agreement(a) Agreement means that both parties agree that the contract be discharged. Some contracts provide for discharge by agreement for example by expressly stating that the contract can be discharged by notice.Alternatively:(b) The contract can be discharged by a completely new agreement e.g. where one party agrees to accept a change in the other's performance (a 'variation' agreement). To be binding such agreements themselves must be supported by consideration.1.3 Performance(a) This is the most common way in which a contract is discharged. It is important that performance occurs as without it there will be a breach of contract. It would also be inequitable to allow one party to sue another for breach if he himself has not performed the terms of the contract exactly and completely. This is known as the rule in Cutter v Powell.(b) Sometimes the rule is Cutter v Powell can act harshly and hence some exceptions to the rule have developed for example where non-performance has been caused by the other party.1.4 Breach(a) Contracts can be discharged by fundamental breaches of contract.(b) Breach of condition:(i) Straightforward breach is easy enough to understand. One or both parties are not complying with the conditions of the contract. Remember the injured party may only bring the contract to an end if there has been a breach of condition.(ii) Anticipatory breach is where one party indicates that he does not intend to complete his part of the contract. The innocent party (the claimant) can sue on notice.But claimant can elect to ignore the breach, complete his part of the contract and then sue: White and Carter (Councils) Ltd v McGregorIf the claimant so elects he must complete his part properly or he himself will be liable for breach.Actions for anticipatory breach should be started at once otherwise factors may intervene which mean the contract is automatically discharged (e.g. on outbreak of war that would render the contract illegal).更多ACCA资讯请关注高顿ACCA官网：。

高顿C A a c c a .g a u n .c nProfessional Level – Options Module, Paper P4Advanced Financial Management June 2012 Answers1REPORT TO THE BOARD OF DIRECTORS, NENTE COIMPACT OF THE TAKEOVER PROPOSAL FROM MIJE CO AND PRODUCTION RIGHTS OF THE FOLLOW-ON PRODUCT The report considers the value of the takeover to Nente Co and Mije Co shareholders based on a cash offer and on a share-for-share offer. It discusses the possible reaction of each group of shareholders to the two offers and how best to utilise the follow-on product opportunity. The significant assumptions made in compiling the report are also explained.The appendices to the report show the detailed calculations in estimating the equity value of Nente Co, the value to Nente Co and Mije Co shareholders of acquiring Nente Co by cash and by a share-for-share exchange, and the value to Nente Co of the exclusive rights to the follow-on product. The results of the calculation are summarised below:Estimated price of a Nente Co share before the takeover offer and follow-on product £2·90/share (appendix i)Estimated increase in share price Nente Co Mije Co Cash offer (appendix ii)1·7%9·4%Share-for-share offer (appendix ii)17·9%6·9%Estimate of the value per share of the follow-on product to Nente Co8·7% (appendix iii)It is unlikely that Nente Co shareholders would accept the cash offer because it is little more than the estimated price of a Nente Co share before the takeover offer. However, the share-for-share offer gives a larger increase in value of a share of 17·9%. Given that the normal premium on acquisitions ranges from 20% to 40%, this is closer to what Nente Co shareholders would find acceptable. It is also greater than the additional value from the follow-on product. Therefore, based on the financial figures, Nente Co’s shareholders would find the offer of a takeover on a share-for-share exchange basis the most attractive option. The other options considered here yield lower expected percentage increase in share price.Mije Co shareholders would prefer the cash offer so that they can maximise the price of their shares and also not dilute their shareholding, but they would probably accept either option because the price of their shares increases. H owever, Mije Co shareholders would probably assess whether or not to accept the acquisition proposal by comparing it with other opportunities that the company has available to it and whether this is the best way to utilise its spare cash flows.The calculations and analysis in each case is made on a number of assumptions. For example, in order to calculate the estimated price of a Nente Co share, the free cash flow valuation model is used. For this, the growth rate, the cost of capital and effective time period when the growth rate will occur (perpetuity in this instance) are all estimates or based on assumptions. For the takeover offer, the synergy savings and P/E ratio value are both assumptions. For the value of the follow-on product and the related option,the option variables are estimates and it is assumed that they would not change during the period before the decision. The value of the option is based on the possibility that the option will only be exercised at the end of the two years, although it seems that the decision can be made any time within the two years.The follow-on product is initially treated separately from the takeover, but Nente Co may ask Mije Co to take the value of the follow-on product into consideration in its offer. The value of the rights that allow Nente Co to delay making a decision are themselves worth $603,592 (appendix iii) and add just over 25c or 8·7% to the value of a Nente Co share. If Mije Co can be convinced to increase their offer to match this or the rights could be sold before the takeover, then the return for Nente Co’s shareholders would be much higher at 26·6% (17·9% + 8·7%).In conclusion, the most favourable outcome for Nente Co shareholders would be to accept the share-for-share offer, and try to convince Mije Co to take the value of the follow-on product into consideration. Prior to accepting the offer Nente Co shareholders would need to be assured of the accuracy of the results produced by the computations in the appendices.Report compiled by:Date:(Note: credit will be given for alternative relevant discussion and suggestions)APPENDICESAppendix i: Estimate of Nente Co Equity Value Based on Free Cash FlowsCompany value = Free cash flows (FCF) x (1 + growth rate (g))/(cost of capital (k) – g)k = 11%Past g = (latest profit before interest and tax (PBIT)/earliest PBIT)1/no. of years of growth – 1Past g = (1,230/970)1/3– 1 = 0·0824Future g = ¼ x 0·0824 = 0·0206高顿财经A C C A a c c a .g a o d u n .c nFCF CalculationFCF = PBIT + non cash flows – cash investment – taxFCF = $1,230,000 + $1,206,000 – $1,010,000 – ($1,230,000 x 20%) = $1,180,000Company value = $1,180,000 x 1·0206/(0·11 – 0·0206) = $13,471,000Equity value = $13,471,000 – $6,500,000 = $6,971,000Per share = $6,971,000/2,400,000 shares = $2·90Appendix ii: Estimated Returns to Nente Co and Mije Co Shareholders Cash OfferGain in value to a Nente Co share = ($2·95 – $2·90)/$2·90 = 1·7%Additional earnings after acquisition = $620,000 + $150,000 = $770,000Additional EPS created from acquisition = $770,000/10,000,000 = 7·7c/share Increase in share price based on P/E of 15 = 7·7c x 15 = $1·16Additional value created = $1·16 x 10,000,000 =$11,600,000Less:paid for Nente Co acquisition = ($2·95 x 2,400,000 shares)$(7,080,000)Value added for Mije shareholders =$4,520,000Gain in value to a Mije Co share = $4,520,000/10,000,000 = 45·2c or 45·2c/480c =9·4%Share-for-share OfferEarnings combined company = $620,000 + $150,000 + $3,200,000 = $3,970,000Shares in combined company = 10,000,000 + 2,400,000 x 2/3 = 11,600,000EPS = 34·2c/share [$3,970,000/11,600,000]Expected share price = 34·2c x 15 = 513c or $5·13/share Three Nente Co shares = $2·90 x 3 = $8·70Gain in value to a Mije Co share = ($5·13 – $4·80)/$4·80 =6·9%Gain in value to a Nente Co share = ($10·26 – $8·70)/$8·70 = 17·9%Appendix iii: Increase in Value of Follow-On Product Present value of the positive cash flows = $2,434,000Present value of the cash outflow = $(2,029,000)Net present value of the new product= $405,000Based on conventional NPV, without considering the value of the option to delay the decision, the project would increase the value of the company by $405,000.Considering the value of the option to delay the decision Price of asset (PV of future positive cash flows) = $2,434,000Exercise price (initial cost of project, not discounted)=$2,500,000Time to expiry of option = 2 years Risk free rate (estimate)=3·2%Volatility=42%d 1= [ln(2,434/2,500) + (0·032 + 0·5 x 0·422) x 2]/(0·42 x 21/2) = 0·359d 2= 0·359 – (0·42 x 21/2) = –0·235N(d1) = 0·5 + (0·1368 + 0·9 x (0·1406 – 0·1368)) = 0·6402N(d2) = 0·5 – (0·0910 + 0·5 x (0·0948 – 0·0910)) = 0·4071Value of option to delay the decision = 2,434,000 x 0·6402 – 2,500,000 x 0·4071 x e –(0·032 x 2)= $1,558,247 – $954,655 = $603,592The project increases the value of the company by $603,592 or 25·1c per share ($603,592/2,400,000 shares). In percentage terms this is an increase of about 8·7% (25·1c/290c).高顿财经A C C A a c c a .g a o d u n .c n2(a)Forecast financial position Amounts in $’000Current Proposal 1Proposal 2Proposal 3Non-current assets 282,000282,000302,000257,000Current assets 66,00064,72067,72063,682––––––––––––––––––––––––––––––––T otal assets348,000346,720369,720320,682––––––––––––––––––––––––––––––––Current liabilities 37,00037,00037,00037,000Non-current liabilities 140,000160,000160,000113,000––––––––––––––––––––––––––––––––T otal liabilities177,000197,000197,000150,000Share capital (40c/share)48,00045,50048,00048,000Retained earnings 123,000104,220124,720122,682––––––––––––––––––––––––––––––––T otal equity171,000149,720172,720170,682––––––––––––––––––––––––––––––––T otal liabilities and capital 348,000346,720369,720320,682––––––––––––––––––––––––––––––––Adjustments to forecast earningsAmounts in $’000Current Proposal 1Proposal 2Proposal 3Initial profit after tax26,00026,00026,00026,000Interest payable on additional borrowing ($20m x 6% x (1 –0·2))(960)(960)Additional interest payable on extra coupon ($160m x 0·25% x (1 –0·2))(320)(320)Interest saved on less borrowing ($27m x 6% x (1 –0·2))1,296Interest saved on lower coupon ($113m x 0·15% x (1 –0·2))136Return on additional investment ($20m x 15%)3,000Return lost on less investment ($25m x 15%)(3,750)Profit on sale of non-current assets2,000––––––––––––––––––––––––––––Adjusted profit after tax26,00024,72027,72025,682––––––––––––––––––––––––––––Current Proposal 1Proposal 2Proposal 3Gearing % (non-current liabilities/equity)81·9%106·9%92·6%66·2%Number of shares (’000)120,000113,750120,000120,000Earnings per share (adjusted profit after tax/number of shares)21·67c21·73c23·10c21·40cNote:Gearing defined as non-current liabilities/(non-current liabilities + equity) and/or using market value of equity is acceptable as well.The profit from the sale of the assets for proposal 3, of $2,000,000, is assumed to be after tax. Answers which consider the profit to be before tax, and therefore only take into account $1,600,000 as the net profit, will receive full credit.Tutorial Note (Explanations are not required for the answer but are included to explain the approach taken)Explanations of the financial position based on the three proposals Proposal 1Debt is increased by $20m and share capital reduced by the same amount as follows: from par value = $20m x 40c/320c = $2·5m; from retained earnings = $20m x 280c/320c = $17·5m.Additional interest payable totaling $1,280,000 ($960,000 + $320,000) is taken off retained earnings due to reduction in profit after tax and taken off current assets because presumably it is paid from cash. Note that an alternative answer would be to add the additional interest payable to current liabilities.Proposal 2Debt and non-current assets are increased by $20m.Additional interest payable as above, plus the additional investment of $20 million will generate a rate of return of 15%,which is $3,000,000 income. Net impact is $1,720,000 income which is added to retained earnings as an addition to profit after tax and added to current assets as a cash income (presumably).Proposal 3Net non-current assets are reduced by the $25 million, their value at disposal. Since they were sold for $27 million, this is how much the non-current liabilities are reduced by and the profit of $2 million is included in the retained earnings.高顿财经A C C A a c c a .g a o d u n .c nInterest saved totals $1,432,000 ($1,296,000 + $136,000). The reduction in investment of $25 million will lose $3,750,000, at a rate of return of 15%. Net impact is $2,318,000 loss which is subtracted from earnings as a reduction from profit after tax and deducted from current assets as a cash expense (presumably). Overall therefore the profit is reduced by $318,000 [$2,000,000 –$2,318,000].If the profit from the sale of the asset is assumed to be $1,600,000 ($2,000,000 less tax), then the statement of financial position, EPS and gearing figures will all change to reflect this.DiscussionProposals 1 and 3 appear to produce opposite results to each other. Proposal 1 would lead to a small increase in the earnings per share (EPS) due to a reduction in the number of shares although profits would decrease by approximately 5%, due to the increase in the amount of interest payable as a result of increased borrowings. However, the level of gearing would increase substantially (by about 30%).With proposal 3, although the overall profits would fall, because of the lost earnings due to downsizing being larger than the gain in interest saved and profit made on the sale of assets, this is less than proposal 1 (1·2%). Gearing would reduce substantially (19·2%).Proposal 2 would give a significant boost in the EPS from 21·67c/share to 23·10c/share, which the other two proposals do not. This is mainly due to increase in earnings through extra investment. However, the amount of gearing would increase by more than 13%.Overall proposal 1 appears to be the least attractive option. The choice between proposals 2 and 3 would be between whether the company would prefer larger EPS or less gearing. This would depend on factors such as the capital structure of the competitors, the reaction of the equity market to the proposals, the implications of the change in the risk profile of the company and the resultant impact on the cost of capital. Ennea Co should also bear in mind that the above are estimates and the actual results will probably differ from the forecasts.(Note: credit will be given for alternative relevant comments and suggestions)(b)Asset securitisation in this case would involve taking the future incomes from the leases that Ennea Co makes and converting them into assets. These assets are sold as bonds now and the future income from lease interest will be used to pay coupons on the bonds. Effectively Ennea Co foregoes the future lease income and receives money from sale of the assets today.The income from the various leases would be aggregated and pooled, and new securities (bonds) issued based on these. The tangible benefit from securitisation occurs when the pooled assets are divided into tranches and tranches are credit rated. The higher rated tranches would carry less risk and have less return, compared to lower rated tranches. If default occurs, the income of the lower tranches is reduced first, before the impact of increasing defaults move to the higher rated tranches. This allows an asset of low liquidity to be converted into securities which carry higher liquidity.Ennea Co would face a number of barriers in undertaking such a process. Securitisation is an expensive process due to management costs, legal fees and ongoing administrative costs. The value of assets that Ennea Co wants to sell is small and therefore these costs would take up a significant proportion of the income. High cost implications mean that securitisation is not feasible for small asset pools.Normally asset pools would not offer the full value of the asset as securities. For example, only 90% of the asset value would be converted into securities, leaving the remaining 10% as a buffer against possible default. This method of credit enhancement would help to credit-rate the tranches at higher levels and help their marketability. However, Ennea Co would not be able to take advantage of the full asset value if it proceeds with the asset securitisation.(Note: credit will be given for alternative relevant comments and suggestions)3(a)Gross amounts of annual interest receivable by Sembilan Co from Ratus Bank based on year 1 spot rate and years 2, 3 and 4 forward rates:Year 10·025 x $320m = $8mYear 20·037 x $320m = $11·84m Year 30·043 x $320m = $13·76m Year 40·047 x $320m = $15·04mGross amount of annual interest payable by Sembilan Co to Ratus Bank:3·76¼% x $320m = $12·04mAt the start of the swap, Sembilan Co will expect to receive or (pay) the following net amounts at the end of each of the next four years:Year 1: $8m – $12·04m = $(4·04m) paymentYear 2: $11·84m – $12·04m = $(0·20m) payment Year 3: $13·76m – $12·04m = $1·72m receipt Year 4: $15·04m – $12·04m = $3m receiptTutorial Note:At the commencement of the swap contract the net present value of the net annual flows, discounted at the yield curve rates, is zero.高顿财经A C C A a c c a .g a o d u n .c nThe reason the equivalent fixed rate of 3·76¼% is less than the 3·8% four-year yield curve rate, is because the 3·8% rate reflects the zero-coupon rate with only one payment made in year four. Here the bond pays coupons at different time periods when the yield curve rates are lower. Therefore the fixed rate is lower.(b)After taking the swap, Sembilan Co’s net effect is as follows:% Impact Yield Interest 3%Yield Interest 4%Borrow at yield interest + 60bp (Yield+0·6)%$(11·52m)$(14·72m)Receive yieldYield $9·6m $12·8m Pay fixed 3·76¼%(3·76¼)%$(12·04m)$(12·04m)Fee 20bp (0·2)%$(0·64m)$(0·64m)–––––––––––––––––––––––––Net Cost(4·56¼)%$(14·6m)$(14·6m)–––––––––––––––––––––––––The receipt and payment based on the yield curve cancels out interest rate fluctuations, fixing the rate at 3·76¼% + 0·6%+ 0·2% = 4·56¼%(c)Reducing the amount of debt by issuing equity and using the cash raised from this to reduce the amount borrowed changes the capital structure of a company and Sembilan Co needs to consider all the possible implications of this.As the proportion of debt increases in a company’s financial structure, the level of financial distress increases and with it the associated costs. Companies with high levels of financial distress would find it more costly to contract with their stakeholders.For example, they may have to pay higher wages to attract the right calibre of employees, give customers longer credit periods or larger discounts, and may have to accept supplies on more onerous terms. Furthermore, restrictive covenants may make it more difficult to borrow funds (debt and equity) for future projects. On the other hand, because interest is payable before tax, larger amounts of debt will give companies greater taxation benefits, known as the tax shield. Presumably, Sembilan Co has judged the balance between the levels of equity and debt finance, such that the positive and negative effects of gearing result in minimising the required rate of return and maximising the value of the company.By replacing debt with equity the balance may no longer be optimal and therefore the value of Sembilan Co may not be maximised. However, reducing the amount of debt would result in a higher credit rating for the company and reduce the scale of restrictive covenants. Having greater equity would also increase the company’s debt capacity. This may enable the company to raise additional finance and undertake future profitable projects more easily. Less financial distress may also reduce the costs of contracting with stakeholders.The process of changing the financial structure can be expensive. Sembilan Co needs to determine the costs associated with early redemption of debt. The contractual clauses of the bond should indicate the level and amount of early redemption penalties. Issuing new equity can be expensive especially if the shares are offered to new shareholders, such as costs associated with underwriting the issue and communicating or negotiating the share price. Even raising funds by issuing rights can be expensive.As well as this, Sembilan Co needs to determine the extent to which the current shareholders will be able to take up the rights and the amount of discount that needs to be given on the rights issue to ensure 100% take up. The impact on the current share price from the issue of rights needs to be considered as well. Studies on rights issues seem to indicate that the markets view the issue of rights as a positive signal and the share price does not reduce to the expected theoretical ex-rights price.However, this is mainly because the markets expect the funds raised to be used on new, profitable projects. Using funds to reduce the debt amount may not be viewed so positively.Sembilan Co may also have to provide information and justification to the market because both the existing shareholders and any new shareholders will need to be assured that the company is not benefiting one group at the expense of the other. If sufficient information is not provided then either shareholder group may discount the share price due to information asymmetry. However, providing too much information may reduce the competitive position of the company.(Note: credit will be given for alternative relevant comments and suggestions)4(a)Use Elfu Co’s information to estimate the component project’s asset beta. Then based on Tisa Co’s capital structure, estimate the component project’s equity beta and weighted average cost of capital. Assume that the beta of debt is zero.Elfu Co MVe = $1·20 x 400m shares = $480m Elfu Co MVd = $96mElfu Co portfolio asset beta =1·40 x $480m/($480m + $96m x (1 –0·25)) = 1·217Elfu Co asset beta of other activities =1·25 x $360m/($360m + $76·8m x (1 –0·25)) = 1·0781·217 = component asset beta x 0·25 + 1·078 x 0·75Component asset beta = [1·217 – (1·078 x 0·75)]/0·25 = 1·634Component equity beta based on Tisa Co capital structure = 1·634 x [($18m + $3·6m x 0·75)/$18m] = 1·879Using CAPM, component Ke = 3·5% + 1·879 x 5·8% = 14·40%Component WACC = (14·40% x $18m + 4·5% x $3·6m)/($18m + $3·6m) = 12·75%高顿财经A C C A a c c a .g a o d u n .c n(b)Process Omega Year01234Net cash flows ($000)(3,800)1,2201,1531,3863,829PV 12·75% ($000)(3,800)1,0829079672,369NPV ($000)1,525PV 30%(3,800)9386826311,341NPV ($000)(208)Internal rate of return is approximately 27·3%Modified internal rate of return (MIRR) is approximately 22·7% ([(5,325/3,800)1/4x (1·1275)] – 1)Alternatively:MIRR can be calculated as follows:Year Cashflows Multiplier Re-invested ($000)amount ($000)11,2201·127531,74921,1531·127521,46631,3861·12751,56343,82913,829T otal re-invested amount ($000) = 8,607MIRR = (8,607/3,800)1/4– 1 = 22·7%The internal rate of return (IRR) assumes that positive cash flows in earlier years are reinvested at the IRR and therefore process Omega, which has higher initial cash flows when compared to process Zeta, gives a slightly higher IRR. The modified internal rate of return (MIRR) assumes that positive cash flows are reinvested at the cost of capital. This is a more reasonable assumption and produces a result consistent with the net present value. Hence, process Zeta should be adopted, although the difference is not significant.[Note:Using 13% instead of 12·75% as the cost of capital is acceptable ](c)99% confidence level requires the value at risk (VAR) to be within 2·33 standard deviations from the mean, based on a single tail measure.Annual VAR = 2·33 x $800,000 = $1,864,000Five year VAR = $1,864,000 x 51/2approx. = $4,168,000The figures mean that Elfu Co can be 99% confident that the cash flows will not fall by more than $1,864,000 in any one year and $4,168,000 in total over five years from the average returns. Therefore the company can be 99% certain that the returns will be $336,000 or more every year [$2,200,000 – $1,864,000]. And it can be 99% certain that the returns will be $6,832,000 or more in total over the five-year period [$11,000,000 – $4,168,000]. There is a 1% chance that the returns will be less than $336,000 each year or $6,832,000 over the five-year period.5(Solution note: The following answer for question 5(a) is indicative. Credit will be given for alternative suggestions of risks and issues, and their management or control.)(a)Kilenc Co needs to consider a number of risks and issues when making the decision about whether or not to set up a subsidiary company in Lanosia. It should then consider how these may be managed or controlled.Key Risks/IssuesKilenc Co needs to assess the impact on its current exports to Lanosia and the nearby countries if the subsidiary is set up.Presumably, products are currently exported to these countries and if these exports stop, then there may be a negative impact on the employees and facilities currently employed in this area. Related to this may be the risk of loss of reputation if the move results in redundancies. Furthermore, Kilenc Co should consider how the subsidiary and its products would be seen in Lanosia and the nearby countries. For example, would the locally made products be perceived as being of comparative quality as the imported products?The recession in Lanosia may have a negative impact on the market for the products. The cost of setting up the subsidiary company needs to be compared with the benefits from extra sales revenue and reduced costs. There is a risk that the perceived benefits may be less than predicted or the establishment of a subsidiary may create opportunities in the future once the country recovers from the recession.Currently the government offers support for companies involved in the pharmaceutical industry. Kilenc Co may find it difficult to set up the subsidiary if it is viewed as impeding the development of the local industry by the government. For example,the government may impose restrictions or increase the taxes the subsidiary may have to pay. On the other hand, the subsidiary may be viewed as supporting the economy and the growth of the pharmaceutical industry, especially since 40%of the shares and 50% of the Board of Directors would be in local hands. The government may even offer the same support as it currently offers the other local companies.高顿财经A C C A a c c a .g a o d u n .c nKilenc Co wants to finance the subsidiary through a mixture of equity and debt. The implications of raising equity finance are discussed in part (b) of the question. However, the risks surrounding debt finance needs further discussion. Raising debt finance in Lanosia would match the income generated in Lanosia with debt interest payments, but the company needs to consider whether or not it would be possible to borrow the money. Given that the government has had to finance the banks may mean that the availability of funds to borrow may be limited. Also interest rates are low at the moment but inflation is high, this may result in pressure on the government to raise interest rates in the future. The consequences of this may be that the borrowing costs increase for Kilenc Co.The composition of the Board of Directors and the large proportion of the subsidiary’s equity held by minority shareholders may create agency issues and risks. Kilenc Co may find that the subsidiary’s Board may make decisions which are not in the interests of the parent company, or that the shareholders attempt to move the subsidiary in a direction which is not in the interests of the parent company. On the other hand, the subsidiary’s Board may feel that the parent company is imposing too many restrictions on its ability to operate independently and the minority shareholders may feel that their interests are not being considered by the parent company.Kilenc Co needs to consider the cultural issues when setting up a subsidiary in another country. These may range from cultural issues of different nationalities and doing business in the country to cultural issues within the organisation. Communication of how the company is organised and understanding of cultural issues is very important in this case. The balance between independent autonomy and central control needs to be established and agreed.Risks such as foreign exchange exposure, product health and safety compliance, employee health and safety regulations and physical risks need to be considered and assessed. For example, foreign exchange exposures arising from exporting the products to nearby countries need to be assessed. The legal requirements around product health and safety and employee health and safety need to be understood and complied with. Risks of physical damage such as from floods or fires on the assets of the business need to be established.Mitigating the Risks and IssuesA full analysis of the financial costs and benefits should be undertaken to establish the viability of setting up the subsidiary.Sensitivity and probability analysis should be undertaken to assess the impact and possibility of falling revenues and rising costs. Analysis of real options should be undertaken to establish the value of possible follow-on projects.Effective marketing communication such as media advertising should be conducted on the products produced by the subsidiary to ensure that the customers’ perceptions of the new products do not change. This could be supported by retaining the packaging of the products. Internal and external communication should explain the consequences of any negative impact of the move to Lanosia to minimise any reputational damage. Where possible, employees should be redeployed to other divisions, in order to minimise any negative disruption.Negotiations with the Lanosian government should be undertaken regularly during the process of setting up the subsidiary to minimise any restrictions and to maximise any benefits such as favourable tax rates. Where necessary and possible, these may be augmented with appropriate insurance and legal advice. Continuing lobbying may also be necessary after the subsidiary has been established to reduce the possibility of new rules and regulations which may be detrimental to the subsidiary’s business.An economic analysis may be conducted on the likely movements in inflation and interest rates. Kilenc Co may also want to look into using fixed rate debt for its long-term financing needs, or use swaps to change from variable rates to fixed rates. The costs of such activity need to be taken into account.Clear corporate governance mechanisms need to be negotiated and agreed on, to strike a balance between central control and subsidiary autonomy. The negotiations should involve the major parties and legal advice may be sought where necessary.These mechanisms should be clearly communicated to the major parties.The subsidiary organisation should be set up to take account of cultural differences where possible. Induction sessions for employees and staff handbooks can be used to communicate the culture of the organisation and how to work within the organisation.Foreign exchange exposure, health and safety regulation and risk of physical loss can be managed by a combination of hedging, insurance and legal advice.(b)Dark pool trading systems allow share orders to be placed and matched without the traders’ interests being declared publicly on the normal stock exchange. Therefore the price of these trades is determined anonymously and the trade is only declared publicly after it has been agreed. Large volume trades which use dark pool trading systems prevent signals reaching the markets in order to minimise large fluctuations in the share price or the markets moving against them.The main argument put forward in support of dark pool trading systems is that by preventing large movements in the share price due to volume sales, the markets’ artificial price volatility would be reduced and the markets maintain their efficiency.The contrary arguments suggest that in fact market efficiency is reduced by dark pool trading systems because such trades do not contribute to the price changes. Furthermore, because most of the individuals who use the markets to trade equity shares are not aware of the trade, transparency is reduced. This, in turn, reduces the liquidity in the markets and therefore may compromise their efficiency. The ultimate danger is that the lack of transparency and liquidity may result in an uncontrolled spread of risks similar to what led to the recent global financial crisis.高顿财经A C C A a c c a .g a o d u n .c n。

2014年ACCA考纲解析白皮书高顿财经研究中心2014年ACCA考试大纲中文全解析引言：ACCA 目前所采用的考试大纲为2007 年启用的考试科目体系。

在ACCA 的考试中，科目的主考考官每年都会针对该科目，撰写详细的考试大纲Syllabus 以及学习指南Study Guide，在考试大纲中考官为明确说明该科目的考试主题内容、范围、考题形式、分值分布等内容，是所有考生参加科目学习前必读的材料，而Study Guide 主要是考官，对整个科目的考试考点的逐点解析，将明确考点在考试中的能力要求，比如背诵、理解、比较、应用等，这对于同学的学习安排也有非常重要的指导意义。

2014 年ACCA 考试迎来了许多新的变化，比如从2014年开始，各科目题型有了很大的调整，F4也可以参加机考，同时大部分科目的考纲出现了不同程度的删减和调整。

本书是高顿研究中心根据2014年1 月官方公布的科目考纲结合高顿研究中心多年跟踪的考试数据编写，并向学员提供了各科目考官的一些基本情况和命题特点，包含了从F1-F9，P1-P5 共14 个科目。

希望帮助ACCA 学员快速理解科目考试大纲，顺利通过考试。

高顿财经ACCA研究中心2014年8月高顿ACCA培训中心介绍高顿财经ACCA培训中心是中国卓越ACCA培训专家！中心全年为超过5000名学员，提供包括业余、寒暑假、全日制、远程课程在内的8大类，超过上万小时的培训课程，并为中国近30所知名大学提供专业的ACCA教学服务。

高顿的教学水平、教学研究、师资团队、教学服务在业界名列前茅，是中国ACCA 培训领域的翘楚。

通过自身的教学研究，高顿财经在教学中采用“任务制教学”、“阶段教学”等前沿的教学理念及方法，开发有适合中国学生的高效教学工具，并拥有一支教学水准高超，教学质量突出的师资团队。

高顿财经的ACCA教学为业界称誉，曾为GE、安永、强生等全球知名企业提供专业培训服务，并深受学员好评！高顿财经得到ACCA官方高度认可，自2009年起高顿财经一直被ACCA英国总部评选为推荐级培训中心。

Advanced Financial ManagementTuesday 2 December 2014Time allowedReading and planning: 15 minutesWriting: 3 hoursThis paper is divided into two sections:Section A – This ONE question is compulsory and MUST be attempted Section B – TWO questions ONLY to be attemptedFormulae and tables are on pages 8–12.Do NOT open this paper until instructed by the supervisor.During reading and planning time only the question paper maybe annotated. You must NOT write in your answer booklet until instructed by the supervisor.This question paper must not be removed from the examination hall.The Association of Chartered Certified AccountantsSection A – This ONE question is compulsory and MUST be attempted1 Nahara Co and Fugae CoNahara Co is a private holding company owned by the government of a wealthy oil-rich country to invest its sovereign funds. Nahara Co has followed a strategy of risk diversification for a number of years by acquiring companies from around the world in many different sectors.One of Nahara Co’s acquisition strategies is to identify and purchase undervalued companies in the airline industry in Europe. A recent acquisition was Fugae Co, a company based in a country which is part of the European Union (EU). Fugae Co repairs and maintains aircraft engines.A few weeks ago, Nahara Co stated its intention to pursue the acquisition of an airline company based in the samecountry as Fugae Co. The EU, concerned about this, asked Nahara Co to sell Fugae Co before pursuing any further acquisitions in the airline industry.Avem Co’s acquisition interest in Fugae CoAvem Co, a UK-based company specialising in producing and servicing business jets, has approached Nahara Co with a proposal to acquire Fugae Co for $1,200 million. Nahara Co expects to receive a premium of at least 30% on the estimated equity value of Fugae Co, if it is sold.Given below are extracts from the most recent statements of financial position of both Avem Co and Fugae Co.Avem Co $ million800 Fugae Co $ million 100Share capital (50c/share)Reserves 3,550 160Non-current liabilities Current liabilities2,200 380130 30 ––––––––––Total capital and liabilities 6,680 670––––––––––Each Avem Co share is currently trading at $7·50, which is a multiple of 7·2 of its free cash flow to equity. Avem Co expects that the total free cash flows to equity of the combined company will increase by $40 million due to synergy benefits. After adding the synergy benefits of $40 million, Avem Co then expects the multiple of the total free cash flow of the combined company to increase to 7·5.Fugae Co’s free cash flow to equity is currently estimated at $76·5 million and it is expected to generate a return on equity of 11%. Over the past few years, Fugae Co has returned 77·3% of its annual free cash flow to equity back to Nahara Co, while retaining the balance for new investments.Fugae Co’s non-current liabilities consist entirely of $100 nominal value bonds which are redeemable in four years at the nominal value, on which the company pays a coupon of 5·4%. The debt is rated at B+ and the credit spread onB+ rated debt is 80 basis points above the risk-free rate of return.Proposed luxury transport investment project by Fugae CoIn recent years, the country in which Fugae Co is based has been expanding its tourism industry and hopes that this industry will grow significantly in the near future. At present tourists normally travel using public transport and taxis, but there is a growing market for luxury travel. If the tourist industry does expand, then the demand for luxury travel is expected to grow rapidly. Fugae Co is considering entering this market through a four-year project. The project will cease after four years because of increasing competition.The initial cost of the project is expected to be $42,000,000 and it is expected to generate the following after-tax cash flows over its four-year life:Year 1 2 3 4Cash flows ($000s) 3,277.6 16,134.3 36,504.7 35,683.6The above figures are based on the tourism industry expanding as expected. However, it is estimated that there is a 25% probability that the tourism industry will not grow as expected in the first year. If this happens, then the present value of the project’s cash f lows will be 50% of the original estimates over its four-year life.It is also estimated that if the tourism industry grows as expected in the first year, there is still a 20% probability that the expected growth will slow down in the second and subsequent years, and the present value of the project’s cash flows would then be 40% of the original estimates in each of these years.Lumi Co, a leisure travel company, has offered $50 million to buy the project from Fugae Co at the start of the second year. Fugae Co is considering whether having this choice would add to the value of the project.If Fugae Co is bought by Avem Co after the project has begun, it is thought that the project will not result in any additional synergy benefits and will not generate any additional value for the combined company, above any value the project has already generated for Fugae Co.Although there is no beta for companies offering luxury forms of travel in the tourist industry, Reka Co, a listed company, offers passenger transportation services on coaches, trains and luxury vehicles. About 15% of its business is in the luxury transport market and Reka Co’s equity beta is 1·6. It is estimated that the asset beta of the non-luxury transport industry is 0·80. Reka C o’s shares are currently trading at $4·50 per share and its debt is currently tradingat $105 per $100. It has 80 million shares in issue and the book value of its debt is $340 million. The debt beta is estimated to be zero.General informationThe corporation tax rate applicable to all companies is 20%. The risk-free rate is estimated to be 4% and the market risk premium is estimated to be 6%.Required:(a) Discuss whether or not Nahara Co’s acquisition strategies, of pursuing risk diversification and of purchasingundervalued companies, can be valid. (7 marks)(b) Discuss why the European Union (EU) may be concerned about Nahara Co’s stated intention and how sellingFugae Co could reduce this concern. (4 marks)(c) Prepare a report for the Board of Directors of Avem Co, which:(i) Estimates the additional value created for Avem Co, if it acquires Fugae Co without considering theluxury transport project; (10 marks) (ii) Estimates the additional value of the luxury transport project to Fugae Co, both with and without the offer from Lumi Co; (18 marks) (iii) Evaluates the benefit attributable to Avem Co and Fugae Co from combining the two companies with and without the project, and concludes whether or not the acquisition is beneficial. The evaluationshould include any assumptions made. (7 marks) Professional marks will be awarded in part (c) for the format, structure and presentation of the report.(4 marks)(50 marks)Section B – TWO questions ONLY to be attempted2 Keshi Co is a large multinational company with a number of international subsidiary companies. A centralised treasurydepartment manages Keshi Co and its subsidiaries’ borrowing requirements, cash surplus investment and financial risk management. Financial risk is normally managed using conventional derivative products such as forwards, futures, options and swaps.Assume it is 1 December 2014 today and Keshi Co is expecting to borrow $18,000,000 on 1 February 2015 for a period of seven months. It can either borrow the funds at a variable rate of LIBOR plus 40 basis points or a fixed rate of 5·5%. LIBOR is currently 3·8% but Keshi Co feels that this could increase or decrease by 0·5% over the coming months due to increasing uncertainty in the markets.The treasury department is considering whether or not to hedge the $18,000,000, using either exchange-traded March options or over-the-counter swaps offered by Rozu Bank.The following information and quotes for $ March options are provided from an appropriate exchange. The options are based on three-month $ futures, $1,000,000 contract size and option premiums are in annual %.March calls 0·882 Strike price95·50March puts0·6620·648 96·00 0·902Option prices are quoted in basis points at 100 minus the annual % yield and settlement of the options contracts isat the end of March 2015. The current basis on the March futures price is 44 points; and it is expected to be33 points on 1 January 2015, 22 points on 1 February 2015 and 11 points on 1 March 2015.Rozu Bank has offered Keshi Co a swap on a counterparty variable rate of LIBOR plus 30 basis points or a fixed rate of 4·6%, where Keshi Co receives 70% of any benefits accruing from undertaking the swap, prior to any bank charges. Rozu Bank will charge Keshi Co 10 basis points for the swap.Keshi Co’s chief executive officer believes that a centralised treasury department is necessary in order to increase shareholder value, but Keshi Co’s new chief financial officer (CFO) thinks that having decentralised treasury departments operating across the subsidiary companies could be more beneficial. The CFO thinks that this is particularly relevant to the situation which Suisen Co, a company owned by Keshi Co, is facing.Suisen Co operates in a country where most companies conduct business activities based on Islamic finance principles. It produces confectionery products including chocolates. It wants to use Salam contracts instead of commodity futures contracts to hedge its exposure to price fluctuations of cocoa. Salam contracts involve a commodity which is sold based on currently agreed prices, quantity and quality. Full payment is received by the seller immediately, for an agreed delivery to be made in the future.Required:(a) Based on the two hedging choices Keshi Co is considering, recommend a hedging strategy for the$18,000,000 borrowing. Support your answer with appropriate calculations and discussion. (15 marks)(b) Discuss how a centralised treasury department may increase value for Keshi Co and the possible reasons fordecentralising the treasury department. (6 marks)(c) Discuss the key differences between a Salam contract, under Islamic finance principles, and futurescontracts. (4 marks)(25 marks)3 Riviere Co is a small company based in the European Union (EU). It produces high quality frozen food which it exportsto a small number of supermarket chains located within the EU as well. The EU is a free trade area for trade between its member countries.Riviere Co finds it difficult to obtain bank finance and relies on a long-term strategy of using internally generated funds for new investment projects. This constraint means that it cannot accept every profitable project and often has to choose between them.Riviere Co is currently considering investment in one of two mutually exclusive food production projects: Privi and Drugi. Privi will produce and sell a new range of frozen desserts exclusively within the EU. Drugi will produce and sell a new range of frozen desserts and savoury foods to supermarket chains based in countries outside the EU. Each project will last for five years and the following financial information refers to both projects.Project Drugi, annual after-tax cash flows expected at the end of each year (€000s)Year Current 1 2 3 4 5Cash flows (€000s) (11,840) 1,230 1,680 4,350 10,240 2,200Privi DrugiNet present valueInternal rate of returnModified internal rate of return Value at risk (over the project’s life) 95% confidence level €2,054,00017·6%13·4%€2,293,000Not providedNot provided€1,103,500€860,000Not providedNot provided90% confidence levelBoth projects’ net present value has been calculated based on Riviere Co’s nominal cost of capital of 10%. It can be assumed that both projects’ cash flow returns are normally distributed and the annual standard deviation of project Drugi’s present value of after-tax cash flows is estimated to be €400,000. It can also be assumed that all sales are made in € (Euro) and therefore the company is not exposed to any foreign exchange exposure.Notwithstanding how profitable project Drugi may appear to be, Riviere Co’s board of directors is concerned about the possible legal risks if it invests in the project because they have never dealt with companies outside the EU before. Required:(a) Discuss the aims of a free trade area, such as the European Union (EU), and the possible benefits toRiviere Co of operating within the EU. (5 marks) (b) Calculate the figures which have not been provided for project Drugi and recommend which project shouldbe accepted. Provide a justification for the recommendation and explain what the value at risk measures.(13 marks)(c) Discuss the possible legal risks of investing in project Drugi which Riviere Co may be concerned about andhow these may be mitigated. (7 marks)(25 marks)4 Kamala Co, a listed company, manufactures parts and machinery for the construction industry. About five years ago,Kamala Co started to manufacture parts and machinery for hospitals and companies engaged in biomedical research using largely the same manufacturing and processing systems it already had in place. In 2011, a young and ambitious chief executive officer (CEO) took over the running of the company.With the publication of the latest financial statements for the year to 30 November 2014, the CEO made a briefstatement and it includes the following two points:–The CEO was very pleased with growth in the financial ratios provided and sales revenue from 2012 to 2014.More pleasing was growth in the share price, which increased even faster than the growth in the market index,suggesting that Kamala Co has been a successful company.–The CEO expressed a desire to make Kamala Co the leading manufacturer of parts and machinery for the construction industry by acquiring a major rival manufacturer in 2015, and financing the acquisition through anissue of a new bond and a small rights issue.An analyst, after examining the recent financial statements and the two points above, was less positive about Kamala Co’s future prospects.Given below are extracts from the recent financial statements, some ratios, and other financial information for Kamala Co.Kamala CoYear ending 30 November (all amounts in $m)2012 2013 2014Sales revenue 3,760 4,054 5,230––––––––––––––––––Operating profit Finance costs714 819 1,09897 168 269 ––––––––––––––––––Profit before tax Taxation617 651 829 154 163 207 ––––––––––––––––––Profit for the year Dividends463 488 622––––––––––––––––––139 137 152Kamala CoYear ending 30 November (all amounts in $m)2012 2013 2014Total non-current assets Total current assets3,962 5,507 7,669 980 1,410 1,880 ––––––––––––––––––Total non-current and current assets 4,942 6,917 9,549––––––––––––––––––EquityOrdinary shares ($0·25) Reserves750 750 750 1,476 1,827 2,297 ––––––––––––––––––Total equity 2,226 2,577 3,047––––––––––––––––––Non-current liabilitiesBank loans 476 1,176 1,316 Bonds 1,008 1,008 2,218––––––––––––––––––Total non-current liabilities 1,484 2,184 3,534––––––––––––––––––Current liabilitiesTrade and other payables Bank overdraft1,232 1,540 2,016 –––––––616 952––––––––––––Total current liabilities 1,232 2,156 2,968––––––––––––––––––Total non-current and current liabilities 2,716 4,340 6,502––––––––––––––––––Kamala Co: By activityYear ending 30 November (all amounts in $m)20122013 2014 Sales revenueConstructionHospitals and biomedical 2,420 1,340 2,644 1,410 3,660 1,570 Operating profitConstructionHospitals and biomedical 460 254489 330693 405Ratios: Kamala Co2012 19·0% 3·3 2013 20·2% 3·6 2014 21·0% 4·1 Operating profit margin Dividend cover Earnings per shareGearing [(debt/debt + equity)] 15·4c 40%16·3c 46%20·7c 54%Other financial information30 November2012 30 November2013 30 November2014 Kamala Co share price ($) Market index Industry index1·69 4,539 840 2·01 5,447 1,092 2·69 6,550 1,422 Industry average PE ratio9·2:112·1:115·3:12013 ($m)2014 ($m) Depreciation deducted to arrive at the operating profit (equivalent to tax allowable depreciation) Economic depreciation826 990 1501,150 1,380 170Non-cash expenses (excluding depreciation)Kamala Co’s cost of capital is estimated to be 10%. The company’s corporation tax rate is 25%. Required:(a) Discuss the advantages and drawbacks of using the economic value added (EVA company’s performance. TM ) technique to assess a(6 marks)(b) Estimate Kamala Co’s EVA for the years ending 30 November 2013 and 30 November 2014. (5 marks)TM(c) Evaluate Kamala Co’s performance and conclude whether the analyst’s opinion or the chief executive officer’s opinion has the greater validity. Include any additional ratio and activity trends, and share priceanalysis, which are deemed to be relevant to the evaluation.(14 marks) (25 marks)FormulaeModigliani and Miller Proposition 2 (with tax)V d V ek e =k ie +(1–T)(k ie –k d )The Capital Asset Pricing ModelE(r i )=R f +®i (E(r m )–R f )The asset beta formula⎩ ⎤ ⎩ ⎤ V eV d (1–T) ®a =⎪ ®e ⎥+⎪ ®d ⎥⎪(V e +V d (1–T)) ⎥ ⎪(V e +V d (1–T)) ⎥ ⎦⎦The Growth Model P o =D o (1+g)(r e –g)Gordon’s growth approximationg =br eThe weighted average cost of capital ⎩ ⎤ ⎥ ⎩ ⎤⎥ V e +V V d +V WACC =⎪ k e +⎪⎪ k d (1–T)⎪ V ⎥ ⎦ V ⎥⎦e d e d The Fisher formula (1+i)=(1+r)(1+h)Purchasing power parity and interest rate parity (1+h ) c F 0 =S 0x(1+i c ) S 1=S 0x(1+h b )(1+i b )Modified Internal Rate of Return1nMIRR =⎪⎩PV ⎤ ( )R ⎥ 1+r e –1⎪PV ⎥ ⎦I The Black-Scholes option pricing modelc =P a N(d 1)–Pe N(d 2e ) –rtWhere:d =ln(P a /Pe )+(r+0.5s 2 )t1s td 2 =d 1–s tThe Put Call Parity relationshipp =c –P a +P e e –rtPresent Value TablePresent value of 1 i.e. (1 +r)–nWhere r = discount raten = number of periods until paymentDiscount rate (r)Periods(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%12345 0·9900·9800·9710·9610·9510·9800·9610·9420·9240·9060·9710·9430·9150·8880·8630·9620·9250·8890·8550·8220·9520·9070·8640·8230·7840·9430·8900·8400·7920·7470·9350·8730·8160·7630·7130·9260·8570·7940·7350·6810·9170·8420·7720·7080·6500·9090·8260·7510·6830·62112345678910 0·9420·9330·9230·9140·9050·8880·8710·8530·8370·8200·8370·8130·7890·7660·7440·7900·7600·7310·7030·6760·7460·7110·6770·6450·6140·7050·6650·6270·5920·5580·6660·6230·5820·5440·5080·6300·5830·5400·5000·4630·5960·5470·5020·4600·4220·5640·5130·4670·4240·3866789101112131415 0·8960·8870·8790·8700·8610·8040·7880·7730·7580·7430·7220·7010·6810·6610·6420·6500·6250·6010·5770·5550·5850·5570·5300·5050·4810·5270·4970·4690·4420·4170·4750·4440·4150·3880·3620·4290·3970·3680·3400·3150·3880·3560·3260·2990·2750·3500·3190·2900·2630·2391112131415(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%12345 0·9010·8120·7310·6590·5930·8930·7970·7120·6360·5670·8850·7830·6930·6130·5430·8770·7690·6750·5920·5190·8700·7560·6580·5720·4970·8620·7430·6410·5520·4760·8550·7310·6240·5340·4560·8470·7180·6090·5160·4370·8400·7060·5930·4990·4190·8330·6940·5790·4820·40212345678910 0·5350·4820·4340·3910·3520·5070·4520·4040·3610·3220·4800·4250·3760·3330·2950·4560·4000·3510·3080·2700·4320·3760·3270·2840·2470·4100·3540·3050·2630·2270·3900·3330·2850·2430·2080·3700·3140·2660·2250·1910·3520·2960·2490·2090·1760·3350·2790·2330·1940·1626789101112131415 0·3170·2860·2580·2320·2090·2870·2570·2290·2050·1830·2610·2310·2040·1810·1600·2370·2080·1820·1600·1400·2150·1870·1630·1410·1230·1950·1680·1450·1250·1080·1780·1520·1300·1110·0950·1620·1370·1160·0990·0840·1480·1240·1040·0880·0740·1350·1120·0930·0780·0651112131415Annuity Table1 – (1 + r)–nPresent value of an annuity of 1 i.e. ————––rWhere r = discount raten = number of periodsDiscount rate (r)Periods(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%12345 0·9901·9702·9413·9024·8530·9801·9422·8843·8084·7130·9711·9132·8293·7174·5800·9621·8862·7753·6304·4520·9521·8592·7233·5464·3290·9431·8332·6733·4654·2120·9351·8082·6243·3874·1000·9261·7832·5773·3123·9930·9171·7592·5313·2403·8900·9091·7362·4873·1703·79112345678910 5·7956·7287·6528·5669·4715·6016·4727·3258·1628·9835·4176·2307·0207·7868·5305·2426·0026·7337·4358·1115·0765·7866·4637·1087·7224·9175·5826·2106·8027·3604·7675·3895·9716·5157·0244·6235·2065·7476·2476·7104·4865·0335·5355·9956·4184·3554·8685·3355·7596·1456789101112131415 10·368 9·78711·255 10·575 9·95412·134 11·348 10·635 9·98613·004 12·106 11·296 10·563 9·8999·253 8·7609·3858·3068·8639·3947·8878·3848·8539·2957·4997·9438·3588·7459·1087·1397·5367·9048·2448·5596·8057·1617·4877·7868·0616·4956·8147·1037·3677·6061112131415 13·865 12·849 11·938 11·118 10·380 9·712(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%12345 0·9011·7132·4443·1023·6960·8931·6902·4023·0373·6050·8851·6682·3612·9743·5170·8771·6472·3222·9143·4330·8701·6262·2832·8553·3520·8621·6052·2462·7983·2740·8551·5852·2102·7433·1990·8471·5662·1742·6903·1270·8401·5472·1402·6393·0580·8331·5282·1062·5892·99112345678910 4·2314·7125·1465·5375·8894·1114·5644·9685·3285·6503·9984·4234·7995·1325·4263·8894·2884·6394·9465·2163·7844·1604·4874·7725·0193·6854·0394·3444·6074·8333·5893·9224·2074·4514·6593·4983·8124·0784·3034·4943·4103·7063·9544·1634·3393·3263·6053·8374·0314·1926789101112131415 6·2076·4926·7506·9827·1915·9386·1946·4246·6286·8115·6875·9186·1226·3026·4625·4535·6605·8426·0026·1425·2345·4215·5835·7245·8475·0295·1975·3425·4685·5754·8364·9885·1185·2295·3244·6564·7934·9105·0085·0924·4864·6114·7154·8024·8764·3274·4394·5334·6114·6751112131415。

2014年6月ACCA真题：F4考题（全球）答案十七8 Anticipatory breach occurs where，prior to the date on which performance is due， it becomes apparent that one of the parties will not perform a substantial part of their obligations under the contract or will commit a fundamental breach of contract. The Convention distinguishes between those cases in which the other party may suspend his own performance of the contract but the contract remains in existence awaiting future events and those cases in which he may declare the contract avoided.Thus as regards the first situation Article 71 provides that a party may suspend performance of his obligations if， after the conclusion of the contract but before it is due to be performed，it becomes apparent that the other party will not perform a substantial part of his obligations as a result of：（a） a serious deficiency in his ability to perform or in his creditworthiness； or（b） his conduct in preparing to perform or in performing the contract.If the circumstances only become apparent after the seller has despatched the goods they may prevent them from being handed over to the buyer， even if the buyer holds a document，such as a Bill of Lading， which entitles the buyer to collect the goods. The party suspending the performance of the contract must immediately give notice of the suspension to the other party and must if that part gives adequate assurance of their future performance then the contract must continue. （Article 71）Alternatively，under Article 72，if prior to the date for performance of the contract it is clear that one of the parties willcommit a fundamental breach of contract， the other party may declare the contract avoided. For a breach of contract to be fundamental， it must result in such detriment to the other party as substantially to deprive him of what they were entitled to expect under the contract，unless the result was neither foreseen by the party in breach nor foreseeable by a reasonable person of the same kind in the same circumstances.If time allows，the party intending to avoid the contract must give reasonable notice to the other party in order to permit him to provide adequate assurance of his performance. However，that requirement does not apply where the other party has expressly stated that that they will not perform their obligations under the contract.Under the facts of the problem scenario it is apparent that Bo has performed an anticipatory breach of his contract with Arti. Arti can suspend performance of the contract and see if Bo changes his mind. Even if he does change his mind， Bo will not be able to claim the acid in spite of holding the Bill of Lading. However，as a result of Bo‘s express repudiation of the contract Arti is entitled to avoid the contract immediately if he chooses and sue Bo for damages.。

ACCA考试F4公司法与商法真题2014年12月(总分100,考试时间120分钟)Section A – ALL 45 questions **pulsory and MUST be attemptedPlease use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer toeach multiple choice question.1. Which of of the following involves an offer which may only be accepted by performing an action?A. A collateral contractB. A unilateral contractC. A bilateral contract2. An agency relationship which is made retrospectively is referred to by which of thefollowing terms?A. Agency by estoppelB. Agency by ratificationC. Agency by necessity3. In contract law, the ‘market rule’ arises in relation to which of the following?A. OfferB. ConsiderationC. RemotenessD. Mitigation4. In relation to a debenture, which of the following is NOT true?A. It may be issued at a discountB. Interest on it may be paid from capitalC. It is paid after preference sharesD. It is freely transferable5. Tan writes to Yun stating that he will sell his car to him for £10,000. At the same time, Yun writes to Tan stating that he will buy his car for £10,000.Which of the following statements applies to this situation?A. There is a binding agreement due to the postal ruleB. There is a collateral contractC. There is neither an agreement nor a contract6. Which of the following statements about contracts of employment is true?A. They can be made either orally or in writingB. They must be made in writingC. They must be evidenced in writing7. Where directors make a false statement of solvency prior to a members’ voluntary liquidation, which of the following have **mitted under the relevant legislation?A. A breach of criminal law with criminal penaltiesB. A breach of civil law with criminal penaltiesC. A breach of civil law with civil liabilityD. A breach of both civil and criminal law with liabilities under both8. Which of the following is the consequence when a patient signs a medical consent form before an operation?A. The patient gives up any right of action for any injury sufferedB. Any action for any injury suffered during the operation is limited to negligenceC. The level of any potential payment for any injury suffered is reduced9. Where a contract states the sum to be paid in the event of a breach of contract, the stated sum is known as which of the following?A. Unliquidated damagesB. Liquidated damagesC. C Specific damagesD. Nominal damages10. Which of the following applies to the concept of enlightened shareholder value?A. It is the price shares can be expected to raise if they were to be soldB. It is the yardstick for assessing the performance of directors’ dutiesC. It is the standard of behaviour expected of shareholders in general meetings11. Which of the following involves a summary dismissal in relation to a contract of employment?A. Both parties agree to end the contract immediately without noticeB. The employee breaks the contract without noticeC. The employer terminates the contract without notice12. What qualification is **pany secretary of a private **pany required to have?A. An appropriate legal qualificationB. An appropriate professional qualification such as ACCAC. No qualification13. Statutory redundancy payment is calculated on the basis of which of the following?A. Length of service and pay onlyB. Age and length of service onlyC. Age, length of service and pay14. In relation to wrongful trading, the standard against which the conduct of directors will be assessed is which of the following?A. Purely subjective, depending on the actual skill of the directorB. Purely objective, depending on what is expected of a director in that positionC. A mixture of subjective and objective but only to increase potential liabilityD. A mixture of subjective and objective but only to reduce potential liability15. Which of the following statements as regards an acceptance of an offer ‘subject to contract’ is true?A. It binds the offerorB. It binds neither partyC. It binds both parties16. Su had just passed her driving test when she negligently drove into a pedestrian. What standard of care will Su be judged by?A. The objective standard of a newly qualified driver, lack of experience will be taken intoaccountB. The objective standard of a competent driver, lack of experience will not be taken into accountC. The subjective standard of actual ability17. Which of the following are ordinary partnerships UNABLE to create in relation to their property?A. MortgagesB. Fixed chargesC. Floating charges18. Which of the following courts deal with civil law matters ONL Y?A. The Crown CourtB. The magistrates’ courtC. The county court19. Jo promises to pay a reward for the return of her lost phone. Mia finds the phone and returns it to Jo.Which of the following types of consideration has Mia provided?A. Executed considerationB. Executory considerationC. Past consideration20. Which of the following requires court approval before the appointment of an administrator?A. CreditorsB. Holders of floating chargesC. The directors of **panyD. **pany itself21. Which of the following is an English court NORMALL Y bound to follow?A. An obiter statement of a higher courtB. A ratio of a lower courtC. A ratio of a court at the same levelD. An obiter statement of the Supreme Court22. Which of the following courts hear appeals from the magistrates’ court?(1) County court(2) Crown Court(3) High CourtA. (1) and (2) onlyB. (2) and (3) onlyC. (1) and (3) onlyD. (1), (2) and (3)23. Which of the following is NOT an automatic consequence of a compulsory winding up order against a public **pany?A. Transfers of shareholdings are suspendedB. Liquidation is deemed to start on the date of the issuing of the orderC. Directors cease to exercise any management powerD. Employees are immediately dismissed24. Which TWO of the following apply to shares of companies whose names end in ‘Ltd’?(1) They may not be issued to non-members(2) They may not be offered to the public (3) They may not be transferred (4) They may not be traded on the stock exchangeA. (1) and (2)B. (2) and (3)C. (1) and (4)D. (2) and (4)25. Which of the following statements regarding the age limits for serving as a director in a public **pany is true?A. Minimum age 16 years and no maximum ageB. Minimum age 21 years and no maximum ageC. Minimum age 21 years and maximum age 75 yearsD. Minimum age 16 years and maximum age 75 years26. Which TWO of the following are private law actions?(1) Those between individuals(2) Those between business organisations(3) Those between individuals and the stateA. (1) and (2)B. (1) and (3)C. (2) and (3)27. In which procedure does a **mittee operate?(1) Compulsory liquidation (2) A members’ voluntary liquidation (3) A creditors’ voluntary liquidation (4) AdministrationA. (1) and (2)B. (2) and (4)C. (1) and (3)D. (3) and (4)28. The category of treasury **es into existence under which of the following circumstances?A. They are issued as such by a **panyB. They are issued as such by a **panyC. They are purchased as such by the exchequerD. They are purchased as such by a private or **pany29. Which of the following is NOT a source of English law?A. CustomB. EquityC. Public law30. Which of the following are owed a duty of care by auditors when preparing a company’s audit report?A. A potential investor with no current holdingB. An existing shareholder looking to increase their holdingC. A company looking to make a takeover bid for **panyD. **pany and the existing shareholders in **pany as a body31. In a potential redundancy situation, an employee may lose the right to payment if they reject an offer of alternative employment within the business.Which of the following will allow the employee to reject the employment offered and claim redundancy?A. The alternative was suitable but the employee reasonably felt that it was not of the same statusB. The alternative was suitable but the employee refused to consider itC. The alternative was suitable but the employee’s grounds for refusing to acc ept it were unreasonable32. hich TWO of the following are reasons for dismissal which must be justified as FAIR?(1) Capability or qualifications of the employee (2) Legal prohibitions relating to the employee (3) Refusal of the employee to join a trade union(4) Taking part in unofficial industrial actionA. (1) and (2)B. (1) and (3)C. (2) and (3)D. (2) and (4)33. What type of contract does an employee have?A. A contract for serviceB. A contract of serviceC. A contract for servicesD. A contract of services34. Which of the following describes a pre-contractual statement which does NOT form a term ofa contract but induces the contract?A. A conditionB. A warrantyC. A representationD. An innominate term35. Which of the following exists as a separate legal entity from its members?A. An ordinary partnershipB. A limited partnershipC. A limited liability partnership36. Which of the following must a **pany ALWAYS have?A. SharesB. Limited liabilityC. A company secretaryD. A registration certificate37. A breach of a contractual warranty enables the injured party to do which of the following?A. To sue for damages onlyB. To sue for damages or terminate the contractC. To sue for damages and terminate the contractD. To terminate the contract only38. n relation to the tort of negligence, which TWO of the following criteria are required to establish the existence of a duty of care?(1) The claimant suffered a financial loss (2) The harm suffered was reasonably foreseeable (3) A relationship of proximity existed between the parties(4) The claimant did not consent to cause the injury sufferedA. (1) and (2)B. (1) and (3)C. (2) and (3)D. (2) and (4)39. In relation to defences to the tort of negligence, which of the following is the consequence of a finding of volentinon fit injuria?A. It removes the requirement to pay damagesB. It reverses the burden of proof as to who can claim damagesC. It increases the level of damagesD. It decreases the level of damages40. Which of the following actions is open to a party who has only partly performed work under a contract?A. Quantum meruitB. Action for the priceC. DamagesD. Restitution41. Which of the following is an example of the purposive approach to statutory interpretation?A. The mischief ruleB. The literal ruleC. The golden rule42. Which is the correct minimum period of notice an employee is entitled to after five years’ service?A. One calendar monthB. Five weeksC. Ten weeksD. Five calendar months43. In relation to agency law, ‘warrant of authority’ is provided by which of the following?A. The agentB. The principalC. The third party44. Which of the following correctly applies to the burden of proof in a criminal case?A. It must be proved beyond reasonable doubtB. It must be proved on the balance of probabilitiesC. It lies with the prosecutionD. It lies with the defence45. Where a business includes a term in a contract which excludes liability for death and personal injuries through negligence, which of the following states the effect of the term?A. It is invalidB. It is invalid unless it is reasonable in the circumstances of the caseC. It is valid only if specifically brought to the attention of the other partyD. It is valid if it is clearly included in the contract termsSection B – ALL FIVE questions **pulsory and MUST be attemptedPlease write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet.1.Ann owns a shop selling prints. She placed an advertisement in the Friday edition of her local paper stating: ‘Unique opportunity to own a Bell print for £500 cash. Offer valid for one day only –tomorrow Saturday.’When Con saw the advert, he immediately posted a letter of acceptance.On Saturday, Di asked Ann if she would take a cheque for £500, but she refused to accept the cheque and told hershe could not have the print. Later that day Ann sold the print to Evi.On Monday morning Con’s letter arrived.Requir ed:In the context of the rules governing the creation of contracts:(a) Describe the precise legal nature of Ann’s advertisement; (2 marks)(b) Explain whether Con has any right of action against Ann; (2 marks)(c) Explain whether Di has any right of action against Ann. (2 marks)2.Fred is a member of Glad Ltd, a small **pany, holding 100 of its 500 shares. The other 400 shares are held by four other members.It has recently become apparent that Fred has set up a rival business to Glad Ltd and the other members have decided that he should be expelled from **pany. To that end they propose to alter the articles of association to include a new power to ‘require any member to transfer their shares for fair value to the other members upon the passing ofa resolution so to do’. Required:(a) State the procedure which Glad Ltd must follow to alter its articles of association.(2 marks)(b) Explain the effect of the requirement that any alteration to a company’s articles of association must be for the benefit of **pany as a whole. (2 marks)(c) Explain whether or not the articles of association of Glad Ltd can be altered as proposed.(2 marks)3.Three years ago Ho subscribed for shares in **panies: Ice Ltd and Jet plc. In relation to the shares in Ice Ltd,Ho was only required to pay 50 pence per £1 share when he took the shares and was assured that he would not be required to make any further payment on them to IceLtd and **pany passed a resolution to that effect.Unfortunately, Ice Ltd has gone into insolvent liquidation owing a substantial sum of money to its creditors. In relation to the shares in Jet plc, Ho was required to pay a premium of 50 pence per £1 share. The shares are currently trading at 75 pence per share.Required:(a) Describe any potential liability Ho may have with regard to the shares he holds in Ice Ltd and to whom any such liability would be owed.(2 marks)(b) Explain the meaning and purposes of a share premium account.(2 marks)(c) Explain whether Ho can gain access to the premium paid on the shares in Jet plc.(2 marks)4.Kut Ltd is a small **pany. Although there are three members of its board of directors, the actual day-to-day running of the business is left to Leo, who simply reports back to the board on the business he has carried out. Leo refers to himself as the chief executive officer of Kut Ltd, although he has never been officially appointed as such.In October 2014, Leo entered into a normal business contract on Kut Ltd’s behalf with Max. However, the other members of the board have subsequently lost confidence in Leo and have refused to pay Max, claiming that Leo did not have the necessary authority to enter into the contract with him. Required:(a) State the usual authority of individual directors to enter into binding contracts on ehalf of **pany.(2 marks)(b) Explain whether or not Kut Ltd is liable to pay Max.(4 marks)5.Nit is involved in illegal activity, from which he makes a large amount of money. He also owns a legitimate **pany and passes off his illegally gained money as profits of that business. Nit employs Owen, who is aware of the illegal source of the money, to act as the manager of the **pany, and Pat as his accountant to produce false business accounts for the taxi business.Required:In the context of the law relating to money laundering:(a)Explain the meaning of layering.(2 marks)(b) Explain whether any criminal offences relating to money laundering may have **mitted by Nit, Owen and Pat.(4 marks)。

ACCA P4考试（ACCA Professional level - Paper P4 Advanced Financial Management）涉及许多概念和技术，因此并没有一个固定的公式列表。

然而，以下是一些可能涉及到的重要概念和公式：1. **资本资产定价模型（CAPM）**：\[ r = r_f + \beta \times (r_m - r_f) \]其中，\(r\) 是资产的预期收益率，\(r_f\) 是无风险收益率，\(\beta\) 是资产的β系数，\(r_m\) 是市场预期回报率。

2. **股票评估**：- **股息折现模型（Dividend Discount Model，DDM）**：\[ P_0 = \frac{D_0 \times (1 + g)}{r - g} \]其中，\(P_0\) 是当前股票价格，\(D_0\) 是当前年度股息，\(r\) 是资本成本，\(g\) 是股息增长率。

- **市盈率（P/E）估值**：\[ P_0 = \frac{EPS_0 \times P/E}{r} \]其中，\(P_0\) 是当前股票价格，\(EPS_0\) 是每股收益，\(P/E\) 是市盈率，\(r\) 是资本成本。

3. **期权定价**：- **布莱克-斯科尔斯期权定价模型（Black-Scholes Option Pricing Model）**：\[ C = S_0 \times N(d_1) - X \times e^{-rt} \times N(d_2) \]其中，\(C\) 是期权价格，\(S_0\) 是股票当前价格，\(X\) 是执行价格，\(r\) 是无风险利率，\(t\) 是到期时间，\(d_1\) 和\(d_2\) 是相关的计算值，\(N\) 是标准正态分布函数。

4. **风险管理**：- **价值-at-Risk（VaR）**：\[ VaR = Z \times \sigma \times V \]其中，\(VaR\) 是价值-at-Risk，\(Z\) 是标准正态分布的Z分数，\(\sigma\) 是资产价格的波动率，\(V\) 是投资组合的价值。

l.Chrysos Co(a)what a reverse takeover involvesgain a listing without initial public offering (IPO)merges with a listed ’shell' companyinitially purchases equity sharesthen issues new equity sharesthereby gain a listingAdvantages relative to an IPOLcompleted much quicker2.cheaper3.potential benefits of going publicDisadvantages relative to an IPO1.hidden liabilities2,original shareholders sell their shares immediately3.cannot develop the necessary expertise and knowledge of listing rules and regulations4.not obtain a sufficient analyst coverage and investor following(b)Report to the board of directors (BoD), Chrysos CoThis report provides extracts from the financial positionIt also contains an explanation of the process usedFinally, the report discussesIt is recommended management buy-out receive $3,289m (appendix one)Extract of Chrysos Co's financial position following the restructuring programmeEstimate of Chrysos Co's equity value following the restructuring programme will be just over $46 billion(appendix three).Process undertaken in determining Chrysos Co's equity valuea growth rate of 4% on cash flows in perpetuitydiscounted at Chrysos Co's cost of capital (appendix two)profit before depreciation and taxdeducting the depreciation and taxationbank loan debt is then deducted (appendix three)Assumptions made in determining Chrysos Cot equity valueungeared cost of equityModigliani and Millcr^s proposition 2accurate estimate of the free cash flows (appendix three)changes in working capital arc reckoned to be immaterialDepreciation is assumed to be the same as the capital needed for reinvestment purposescash flows will grow in perpetuity over-oplimisticImpact of the restructuring programme on Chrysos Co and on the venture capital organisations (VCOs) venture capital organisations (VCOs)the proportion of the VCOs' equity share capital will increase to 40%the share of the equity value increase by $9,229m,which is 77-5% more than the total of the value of bonds cancelled and extra payment made (appendix four) the value of their investment has increased substantiallyfeasibility studyon the annual growth rate in cash flows of 4%and the assumption of growth in perpetuitythe extent of additional value created indicate the impact is positiveChrysos Coraise extra debt financejust under $9,600m of possible debt finance which could be accessedraise just under an extra $7,800m debt fundinghave $1,439 million in net cash available from the sale of the machinery parts manufacturing business unit・given that the company has access to an extra $7.800m debt funding to expand its investmentit is likely that the restructuring programme will be beneficialrecommended tries to determine its current equity value and comparesshareholder groups need to be satisfiedabout the potential negative impact of these situationsagainst the potential additional benefitsbefore proceeds with the programme.Conclusioncreates an opportunity for Chrysos Co to have access to extra fun dingThe VCOs are likely to ben efit financially as long as they are satisfied about the assumptionsHowever, Chrysos Co will need to ensure thatall equity holder groups are satisfied with the change in their respective equity holdings.Report compiled by:Date:AppendicesAppendix One: Unbundling the manufacturing business unitOption 1: Sale of assetsNet proceeds to Chrysos Co from net sale of assets of the manufacturing business unit arc $3,102 million. Option 2: Management buy-outProfit before depreciation, interest and taxDepreciation (12% x 20% x ($7,500m + $5,400m))Tax (18% x $530m)Cash flowsEstimated value = ($435m x 1-08)/0-10 = $4,698mAmount payable to Chrysos Co = 70% x $4,698m = $3,289moption 2 marginally betterAppendix Two: Calculation of cost of equity and cost of capitalChrysos Co, estimate of cost of equity (Ke) and cost of capital (CoC)Ke = Modigliani and Miller Proposition 2 (with tax)CoC = The weighted average cost of capitalAppendix Three: Estimate of valueProfit before depreciation and taxDepreciation (12% x ($6,000m + $5,520m)) (1,382)Tax (18% x $4,498m)Cash flowsCost of capital to be used in estimating Chrysos Co's value is 12% (appendix two) Estimated corporate value =The Growth ModelEstimated equity value = corporate value 一debtAppendix Four: Value created for VCOsValue ailributable to the VCOsValue from increased equity ownership (this has doubled from 20% to 40%)Value of unsecured bonds foregone by the VCOsAdditional capital invested by the VCOsTotal of additional capital invested and value of bonds forgoneAdditional value 77-5% (or $4.029m)(c)As a private company,Representatives from each groupsdecisions will be made after agreement from all representativesno single stakeholder group holds primacy over any other groupOnce listedhave a large and diverse range of equity shareholderspressure to engage in value creating activitythe equity shareholders, needs will hold primacy over the other stakeholder groups the power of the supervisory board will diminish as a rcsul3 Buryccs Co(a)currency swaptaking out a loan in €making an arrangement with a counterparty in Wirtoniawhich lakes out a loan in $pay the interest on the counterparty \ loanand vice versaAdvantagesmatch the income, reducing foreign exchange riskreverse the swap by exchanging with the other counterpartyOther methods of hedging risk may be less certaincheaper than other methods of hedgingchange debt profile, diversify risk and lake advantage of probable lower future interest ratesDrawbackscounterparty may default, pay interest in its currency, reduced by obtaining a bank guaranteenot worthwhile if the exchange rate is unpredictableexchange rates largely determined by inflation ralespredicted inflation rate in Wirtonia is not stableInflation is increasing in Wirtoniainterest rates will increase as a result,increasing Buryecs Co's finance costs.docs not hedge the whole amountAnother method hedge the additional receipt in Year 3 and the receipts in the intervening yearsexchange controls, no receipt at the end of Year 3(b)(i)Gain on swapBank feeGain on swap after bank feeThe swap arrangement will work as follows:AdvantageNet resultAfter paying the 30 point basis fee, Buiyccs Co will effectively pay interest at the bank rate 一0-3% and benefit by90 basis points or 0-9%・The counterparty will effectively pay interest at 5-2% and benefit by 60 basis points or 0-6%・(ii)Using the purchasing power parity formula to calculate exchange rates:Si 二Sox (1 + hc)/(1 +hb)At Year 3, $5.000 million will be exchanged at the original spot rate as per the agreement and the remaining inflows will be exchanged at the Year 3 rale・Swap translated at 0-1430Amount not covered by swap translated at 0-1315Cash flows in home countryDiscount factorPrcscnt valueThe net present value of the project is €185 nmillion、indicating that it should go ahead・However, the value is dependent on the exchange rate, which is worsening for the foreign income・also uncertainties about the variability of returns during the three yearsin excess of their risk appetite and dccli ne the opport unity(C)Receipt using swap arrangement = €715m + €329m = € 1,044mReceipt if transaction unhedged = $7,500m x ()• 1315 = €986mPredicted exchange rate at year 3 is €01315 = SI or S7-6046 = €1OptionsBuy $ put options as receiving $$7・75 exercise priceDo not exerciseNet receipt = €986m - (1 • 6% x $7,500m x 0-1430) = €969rn$7*25 exercise priceExerciseReceipt from government = $7,500m/7・25 = € 1,034mNet receipt = € 1,034m - (2-7% x $7,500m x 0-1430) = €1,005mThe $7-25 option gives a better result than not hedging, given the current expectations of the exchange rate. However, it gives a worse result than the swap even before the premium is deducted, because of the exchange rate being fixed on the swap back of the original amount paid.These calculations do not take into account possible variability of the finance costs associated with the swap, caused by swapping into floating rate borrowing.1 Morada Co(a)how business risk and financial risk are relatedengage in some risky activities to generate returns in excess of the risk free rate of returnexposed to differing amounts of business and financial riskBusiness riskdepends on the decisions a business makes with respect to the services and products it offers consists of the variability in its profitsFinancial riskrelates to the volatility of earnings due to the financial structure of the businessthe shareholders or owners may not want to bear risk beyond an acceptable levelrisk management strategyrisk identification, assessingmeasuring through predicting, analysing and quantifying itwhich risks to assume, avoid, retain and transfernot aim to avoid all riskscontrollability, frequency and severity of the riskeliminate or reduce some risks through risk transferRisk mitigation is the process of transferring risksRisk diversification is a process of risk reduction(b)Report to the board of directors (BoD), Morada CoThis report provides a discussion onThe main assumptions made in drawing up the estimates will also be explained・The report concludes by recommendingDiscussionThe table belowthe cost of equity and the cost of capital (appendix 1)the forecast earnings after tax for the corning year (appendix 2)comparison purposes, figures before any changestax shield is reduced significantly due to the lower amount of debt borrowinghigher business riskmore than override the lower cost of debtthe benefit of the tax shield is also almost eroded by the increase in the cost of debt as a percentage of non-current assetsUnder the first director's proposalUndcr the second director's proposalAssumptions1 ・ weighted average of the asset betas2.share price not changing3.the current assets will change due to changes in the profit after tax figureRecommendationIt is recommended thatThe second results ina lower return on investmentand a virtually unchanged cost of capitalfirstincrease the return on investmentbut higher cost of capitalreduce risk, not achievedcaveatassumptions made not reasonable, reduce the usefulness of the analysisReport compiled by:Date:。

ACCA考试P4历年真题精选及详细解析1109-76Question：ST Inc makes a bid to acquire all the share capital of WV Inc, paying for the acquisition by means of a share exchange. The shares of ST Inc are currently trading on a P/E of 12.5 and the shares of WV Inc are trading on a P/E ratio of 15. No savings or increase in combined sales are expected as a result of the takeover.Given no change in the annual profits after tax of either company, what will happen to the earnings per share of the combined ST group after the takeover?A. EPS will remain the same.B. EPS will go down.C. It is impossible to assess, without figures for earnings and numbers of shares.D. EPS will go up.The correct answer is: EPS will go down.When the bid consideration is all in shares and one company buys another on a higher P/E ratio, the EPS will fall after the takeover unless total profits can be increased after the takeover, perhaps through economies of scale or higher combined total sales. In this question, there are no such profit increases.。