Weighted Average Cost of Capital (WACC) simplified | ACCA FM / F9 | Question Fence

[@semalkhan14]

this is awesome

[@SteveWillisACCA]

Glad you like it!

[@semalkhan14]

@@SteveWillisACCA is there any CBe technique for money market hedging

[@krish9663]

If the question states Reserves under Ordinary Shares.. do you add Reserves to the calculation? I marked it as 0.

[@SteveWillisACCA]

In what context? WACC? It's # of ordinary shares * market price: the market price should reflect those reserves, risk, etc...

[@krish9663]

@SteveWillisACCA yes, WACC, the SFP extract had values for Ordinary Shares, Reserves, Preference Shares and a Loan Note. Question asked to calculate WACC at market value, so I adjusted ordinary shares at market value price, reserves i included as 0 and left a note below workings with my reasoning

[@atharvakulkarni3516]

Hi Steve Willis Sir your videos are really helpful, they helped in passing PM and are now for FM, can you please solve another WACC question especially TANZA CO, I am unable to understand the Present values used there, thank you.

[@SteveWillisACCA]

Yes, soon

[@huzaifasaifuddin9535]

Hello sir.. Is it allowed to use the IRR formula in exams ? Because my tutor taught me a different tecnique to calculate the IRR with 2 different discounting factors just like the workings mentioned in the exam kitt .. please let me knw

[@SteveWillisACCA]

Yes, the IRR Function is fine to use--this was stated at a learning provider's conference and you can find this online.

[@huzaifasaifuddin9535]

Thank you so much sir .. God bless you

[@karts2010]

@@SteveWillisACCA Hi Steve - IRR function is not working, when tried in practice platform

[@SteveWillisACCA]

@@karts2010 That's strange, it works fine here. I'm looking at the FM specimen exam and typed "=IRR(B6:E6)" into a cell and it gave me the IRR...

[@charliepaviour]

Hi. For the ordinary shares, cost of capital calculation you ended it by doing the market return 0.11 less the risk free 0.04. But on another video of yours for the question Corfe, you didn't take off the risk free rate at the end of that calculation. Which is correct or why was it done on this question and not the other? Thanks

[@SteveWillisACCA]

For WACC, sometimes they give you (a) "market return" and (b) "Risk Free." You subtract B from A to get (c) 'risk premium'. However, sometimes they just give you C, so you don't need to do the previous step.

[@wazeerabdool7617]

Hi Sir, But what about question 219 Dinla Where there are preference shares and Bank loan. Can we use the same approach?

[@SteveWillisACCA]

You can use the approach for any WACC question: check kzbin.info/www/bejne/hWWxi2hpr5iVaa8

[@maoriju]

WACC Prince !! 😀 typo …

[@SteveWillisACCA]

Sorry? :) not following