Forums
Expected return in Illustration 28
AFM
answered on 16-Apr-25 13:06
I did not understand the concept of E(R) = ke of existing ÷ ke of revised and its relevance in this illustration. Kindly shed some light on it.
latest answer
I am just saying it could Ke existing or Ke revised I am not saying one divided by the other :)
Ruthvik Reddy Adala
CA Final
★ 5K+
1
220
Gordon's formula
AFM
answered on 16-Apr-25 14:14
Can we use "e(1-b)/Ke-br" formula for this problem in cas of gordons method?
latest answer
Thank u sir
Narmada Chennuru
CA Final
★ 4K+
2
295
Reinvestment of CFs arising from the original investment
AFM
answered on 15-Apr-25 16:48
Dear Sir, I have assumed that the CFs from the original investment are reinvested immediately on an annual basis and received CFs at a reinvestment rate of 16%. The gain from the investment is also reinvested for the balance period. I got the different number can you please check the workings attached and clarify the same.
latest answer
Reinvestment
Chaitanya Sai Gupta
CA Final
★ 4K+
1
413
Cost of carry
AFM
answered on 14-Apr-25 13:19
Sir, could you explain what is the purpose of adding cost of carry (which is interest amount on loan borrowed), while computing theoretical future value
latest answer
Understood sir👍
Nitin Raj
CA Final
★ 270
2
281
EVA
AFM
answered on 14-Apr-25 06:57
Why working capital should be added to invested capital?
latest answer
Invested capital
VIJAY ANVESH VADLAPUDI
CA Final
★ 2K+
1
379
Illustration 17 (additional illustrations)
AFM
answered on 13-Apr-25 21:52
In this question, it is same as illustration 7 which we solved the only difference i saw was of wording which was " the entity is eligible for tax credit in india" and now i solved it in regular manner however in your solution of this question you have assumed no tax credit available, but the wording clearly specifies. Now as the wording specifies, what treatment shall be done?
latest answer
Point where profits are earned first Which ever tax is deducted there that is to be paid first
Hrishikesh Pradhan
Qualified CA
★ 18K+
3
290
Principle of ability to share
AFM
answered on 13-Apr-25 20:27
In this question, i did not understood the meaning of this line (pt ii): " ...and project's share of allocated fixed cost will be US $ 3 mill pa based on principle of ability to share" So, what does this line means and why we have not considered it.
latest answer
Ability to share
Hrishikesh Pradhan
Qualified CA
★ 18K+
1
295
NPV computation
AFM
answered on 13-Apr-25 14:20
in this question, i was confused that earlier i was solving like after EBITDA, considering depreciation, i will get EBIT, then i considered interest outflow and then on that i considered tax, so it will include tax shield indirectly right? Why my logic is incorrect in this case
latest answer
Ys
Hrishikesh Pradhan
Qualified CA
★ 18K+
3
246
Queries
AFM
answered on 13-Apr-25 14:13
I had 2 questions in this problem: 1. In earlier NPV problems we added back the Tax in computing FCFF, why here we did not added, could you explain its logic. 2. Also, how to identify in a question whether the decision is to be taken by converting into INR or Foreign currency
latest answer
In problem 1 tax paid vs tax accounted there is difference in timing. Unless mentioned in the question that the tax is paid next year in which case an adjustment has to be done, In all other problems, assume tax is accounted and paid in same year and therefore no need to add back or deduct tax in computing FCFF How to decide in which currency to see CF , depends on discount rate. In which currency is discount rate provided Also, look at last Q in this chapter, you have FC & HC approach, there also it will be very clear what you have to do
Hrishikesh Pradhan
Qualified CA
★ 18K+
1
403
IFC
AFM
answered on 12-Apr-25 20:23
For IFC, in india i have SEBI, so does that mean SEBI don't apply in IFC. So, is it not that a lot of scams can take place ?
latest answer
IFC
Hrishikesh Pradhan
Qualified CA
★ 18K+
1
345