WACC SIMPLIFED | ACCA paper FM CBE Exam | Question Corfe | Weighted Average Cost of Capital
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Күн бұрынLearn how to quickly solve a weighted average cost of capital (WACC) question, for FM / F9 students. I'll take you through question Corfe from the March/June 2019 exam in the spreadsheet tool. We'll cover capital asset pricing model (CAPM), preference shares, straight bonds, the IRR function, and WACC, showing you how to pass the ACCA FM exam.
Here's Question Corfe from ACCA FM March/June 2019: drive.google.com/file/d/1ACZO...
Get Help, exam tips and technique for the ACCA FM CBE exam.
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Table of Contents:
00:00 - Introduction
01:17 - WACC Template
02:50 - Capital Structure
03:22 - Market Value of the Loan
03:46 - Market value of the ordinary shares
04:21 - Market Value of the Preference Shares
04:52 - Market Value of the Loan Notes
05:27 - Cost of Equity of the Ordinary Shares
06:24 - Cost of Equity for Preference Share
08:13 - Cost of Debt of the Loan Notes
08:25 - How to use the IRR Function
11:36 - Market Values x Costs of Capital
12:36 - WACC Weighted Average Cost of Capital
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Steve Willis
ACCA www.stevewillistraining.com
How to Pass ACCA CBE Exams
Weighted average cost of capital (WACC) help
For more information on ACCA FM WACC video on Open Tuition: • The weighted average c...
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@Zerkxh Жыл бұрын
This video literally changed my whole understanding of this type of question - actually a lot more simple than it looks after your breakdown. Thank you!
@SteveWillisACCA Жыл бұрын
Glad it helped!
@dorothynagadya9849 2 жыл бұрын
Brilliant!! Thank you sooooo much Steve. I didn’t know we could use the IRR function in cbe. Thank you 🙏🏽
@SteveWillisACCA 2 жыл бұрын
You are welcome :)
@S09IA 2 жыл бұрын
Hi Steve, the FM and PM playlists have been invaluable to me in the week leading up to the exams I just sat. I feel positive about my attempts thanks to all I learnt watching these videos alongside spreadsheet practice. Saved so much time compared to trying to work things out from the model answers which aren't tailored to the spreadsheet. This WACC format is great, although no WACC questions came up I'm really glad to have learnt this method. Hope I don't have to revisit this exam but one suggestion for more videos is to please cover the dividend growth rate and growth model and more on hedging. Thank you so much!
@SteveWillisACCA 2 жыл бұрын
Thanks! Will do
@KhabibandEnola Жыл бұрын
this is so cool! especially the IRR function. thank you!
@SteveWillisACCA Жыл бұрын
Glad it helped:)
@xingyee6149 Жыл бұрын
Thank you so much Steve! You just made the question so easy!
@SteveWillisACCA Жыл бұрын
Glad it was helpful. Good luck :)
@Whit3_SyrupWaff3ls 11 ай бұрын
This is just amazing!! Thank you so much!
@SteveWillisACCA 11 ай бұрын
You're so welcome!
@vaishalisiddhu7145 2 жыл бұрын
Thank you so much. Very well explained. Love and regards from India 🙏
@SteveWillisACCA 2 жыл бұрын
Glad it was helpful!
@shivasharma9406 2 жыл бұрын
gd evening steve, your cbe tips are very help[ul for me as i could cover all question in very short time... a lots of love from india 🙏🙏🙏
@SteveWillisACCA 2 жыл бұрын
Great to hear. Good luck next week!
@premlady2365 Жыл бұрын
Your videos just make it look so easy to pass, many thanks 😊
@SteveWillisACCA Жыл бұрын
You are welcome. Good luck 🤞
@asimdawre6632 2 жыл бұрын
As usual one of the best ....... really helpful sir thanx a lot for ur help.....
@SteveWillisACCA 2 жыл бұрын
Always welcome
@skullman251 Жыл бұрын
Really helpful video. Thanks much!
@SteveWillisACCA Жыл бұрын
Glad you found it helpful! Good luck Friday :)
@kennniiikc3162 8 ай бұрын
very helpful table format for WACC.Thx a lot.
@SteveWillisACCA 8 ай бұрын
Most welcome!
@garagefridge8930 Ай бұрын
First of all, thanks for the help Steve. Secondly, my Kaplan FM exam kit book has the exact same question as this (Corfe Co Mar/Jun 2019) however it says the cost of equity for the loan notes (and bank) is 7.44% as it calculates the IRR manually instead of using the function on the spreadsheet, can I use the IRR function without being penalised for it in the exam?
@SteveWillisACCA Ай бұрын
Glad the videos help! Yes, no problem to use the IRR formula in the exam. The new model answers show this approach. Good luck on your exam!
@mohammedfaysal249 10 ай бұрын
Your video is very helpful
@SteveWillisACCA 10 ай бұрын
Glad it was helpful!
@umerg0raya Жыл бұрын
Thank you very much
@SteveWillisACCA Жыл бұрын
You are welcome
@encymathews 4 ай бұрын
Hi Steve , can we use the IRR function to calculate cost of capital if 8% Bonds (100$ Nominal ) SFP- $120 ; before tax cost of debt is 7% and bond will be redeemed at nominal value in 6 yrs time is given in the question . Thanks
@SteveWillisACCA 4 ай бұрын
SFP--is this market price? Sure you can put that in a spreadsheet and calculate IRR--but you might want after tax cost of debt if it's for WACC.
@Jean_Lobo 2 жыл бұрын
Sir do we have to consider interest on loan note even on the 5th year when it's reedemed on premium
@SteveWillisACCA 2 жыл бұрын
Consider the interest any time it's a cashflow when doing IRR on a bond. Redeemed at premium or par at the end of the year doesn't, the investor still gets the interest payment for that year.
@wasifbhaukaurally2085 Жыл бұрын
Thank you much for this video. I have one question, can we always use the IRR function? Will we be credited the same marks without showing the calculations of the IRR?
@SteveWillisACCA Жыл бұрын
Yes, you'll get the same marks, and save a lot of time.
@wasifbhaukaurally2085 Жыл бұрын
@@SteveWillisACCA thank you
@vanshikawadhwani6119 2 жыл бұрын
I'm planning to start studying ACCA course. One question, in computer based exams, do we have to solve questions on excel?
@SteveWillisACCA 2 жыл бұрын
Hi there some exams give you a spreadsheet to do your work but you will also have to solve multiple choice and other question types where you do calculations with a calculator
@muhammadbaqir4861 2 жыл бұрын
My exam is on Friday and it is helping me a lot. Please confirm if we can use formula in exam instead of working??
@SteveWillisACCA 2 жыл бұрын
Absolutely use the spreadsheet functions--you'll get full marks. The recent examiner's reports say this.
@muhammadbaqir4861 2 жыл бұрын
Thankyou Sir love from Pakistan ♥️. Please pray for my success. JazakAllah
@SteveWillisACCA 2 жыл бұрын
Fingers crossed for you!
@bilawaltariqkhan191 2 жыл бұрын
Can you plz confirm can we use this IRR function in exam and won't lose marks as my teachers have always told me to show your workings. Traditionally we use two different cost of capital, the NPV with those cost of capitals and than finally IRR The answer with the traditional method is around 7.4% whereas with the function its 7.27% Plz reply
@SteveWillisACCA 2 жыл бұрын
100% you can use the functions it even says that in the examiners reports now.
@KhabibandEnola Жыл бұрын
@@SteveWillisACCA Thanks for your clarification sir.
@KhabibandEnola Жыл бұрын
Pls at least use "would you please" when ask a question instead of "Can you", pls show some respect
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