2008年6月、12月ACCA F9考试真题及答案

2008年6月、12月ACCA F9考试真题及答案

Financial Management
Thursday 4 December 2008

ALL FOUR questions are compulsory and MUST be attempted
1 Dartig Co is a stock-market listed company that manufactures consumer products and it is planning to expand its
existing business. The investment cost of $5 million will be met by a 1 for 4 rights issue. The current share price of
Dartig Co is $2·50 per share and the rights issue price will be at a 20% discount to this. The finance director of Dartig
Co expects that the expansion of existing business will allow the average growth rate of earnings per share over the
last four years to be maintained into the foreseeable future.
The earnings per share and dividends paid by Dartig over the last four years are as follows:
2003 2004 2005 2006 2007
Earnings per share (cents) 27·7 29·0 29·0 30·2 32·4
Dividend per share (cents) 12·8 13·5 13·5 14·5 15·0
Dartig Co has a cost of equity of 10%. The price/earnings ratio of Dartig Co has been approximately constant in recent
years. Ignore issue costs.
Required:
(a) Calculate the theoretical ex rights price per share prior to investing in the proposed business expansion.
(3 marks)
(b) Calculate the expected share price following the proposed business expansion using the price/earnings ratio
method. (3 marks)
(c) Discuss whether the proposed business expansion is an acceptable use of the finance raised by the rights
issue, and evaluate the expected effect on the wealth of the shareholders of Dartig Co. (5 marks)
(d) Using the information provided, calculate the ex div share price predicted by the dividend growth model and
discuss briefly why this share price differs from the current market price of Dartig Co. (6 marks)
2 The following financial information related to Gorwa Co:
2007 2006
$000 $000
Sales (all on credit) 37,400 26,720
Cost of sales 34,408 23,781
——- ——-
Operating profit 2,992 2,939
Finance costs (interest payments) 355 274
——- ——-
Profit before taxation 2,637 2,665
——- ——-
2007 2006
$000 $000 $000 $000
Non-current assets 13,632 12,750
Current assets
Inventory 4,600 2,400
Trade receivables 4,600 2,200
—— ——
9,200 4,600
Current liabilities