Hi,
I have a query.. I am not from commerce background and I want to appear for CFA exam. I bought KAPLAN study notes in xerox , but I am not able to understand all the terms in it. So, should I go for curriculum or I have to study some basic terms from elsewhere? Nirmal sir please give me some advice on study plan too.. @Nirmal_Analyst
Hi,I have a query.. I am not from commerce background and I want to appear for CFA exam. I bought KAPLAN study notes in xerox , but I am not able to understand all the terms in it. So, should I go for curriculum or I have to study some basic terms from elsewhere? Nirmal sir please give me some advice on study plan too.. @Nirmal_Analyst
@rushikesh90 which topic did you start with? The kaplan and CFA curriculum books are more or less same in terms of simplicity as far as I know. What is your educational background?
CFA Level 1 Preparation Progress Tracker
We have prepared a worksheet to help you track your preparation for CFA Level-1 December 2013 Exams. This will be useful tool to alert yourself when you fall behind the plans. Please register in the below link, we will email you the worksheet. Note: Please do not leave your email ID in the comment box, kindly click the below link and type the Email ID there.
CFA Level 1 question 9
Brigade Ltd currently has total asset size of USD 110 mn. The company's book value of equity is USD 65 mn while the market cap is USD 97 mn. The cost of equity of brigade is 11.2%. The debt of the company is issued as bonds with coupon of 4.5% and has 5 years remaining for maturity. The bonds which pay coupons semi-annually are quoting at a yield of 3.9% The Company's marginal tax rate is 35%. The Weighted Average Cost of Capital of Brigade Ltd would be close to
a) 8.40%
b) 8.45%
c) 8.84%
Answer A: Finding market value of debt: Face value of debt = BV of assets €“ BV of equities; 110- 65= 45; Coupon = 4.5%, yield 3.9%. Semi-annual coupon is known. Market Value of debt = 46.22
Market value of debt = $46.22 mn. Market value of equity = $97 mn. Cost of debt = 3.9%, post tax cost of debt = 3.9% * (1-35%)= 2.54%. WACC =8.40%.
CFA Level 1 question 10
NNC Ltd has 100 mn preferred shares outstanding. The cumulative market value of these preference shares is USD 980 mn. Each preference share pays a dividend of USD 0.51. The effective tax rate of the company is 30% and the book value of these shares is USD 800 mn. The cost of NNC's preferred equity is close to
a) 3.64%
b) 5.20%
c) 6.38%
CFA Level 1 question 10
NNC Ltd has 100 mn preferred shares outstanding. The cumulative market value of these preference shares is USD 980 mn. Each preference share pays a dividend of USD 0.51. The effective tax rate of the company is 30% and the book value of these shares is USD 800 mn. The cost of NNC's preferred equity is close to
a) 3.64%
b) 5.20%
c) 6.38%
Answer B: Price of Pref share = 980/100 =9.8. Cost of pref share = 0.51/9.8 = 5.20%. Remember Pref share do not attract tax shield.
CFA Level 1 Question 11
DIFC Ltd paid a dividend of $1.3 last year and the dividends are expected to grow at a rate of 5% perpetually. The shares of DIFC are trading at a price of $ 38.5. The cost of capital for DIFC using dividend discount model is closest to
a) 8.38%
b) 3.55%
c) 8.55%
Hi @Nirmal_Analyst i am from engg background and i am planning to give CFA level 1 this december.Will 5 months be enough to prepare for level 1 ??
Just decided to give CFA level 1 this december.. Guys, can anyone clarify my doubt?
I have not registered yet, it says you should be in the final year of graduating while registering. Now my final year classes are starting from 5th of august, I want to confirm if I will be eligible to register and give level 1 exam in dec 2013 or not?
Thank you in advance.
We are organizing a free interactive webinar on 'Introduction to Financial statements'. This will be useful if you area) CFA Level 1 candidate or Aspirantb) First year MBA student intending to specialize in financec) Engineer who wish to make a career in Financial servicesd) Wanting to understand financial statements and their inter linkagesDate: July 13, 2013 SaturdayTime: 9 pm IST; 3.30 pm GMT; 10.30 am New York Time. If interested please register in the below
link
This program aims to introduce Financial Statements for Starters.
CFA Level 1 Question 11
DIFC Ltd paid a dividend of $1.3 last year and the dividends are expected to grow at a rate of 5% perpetually. The shares of DIFC are trading at a price of $ 38.5. The cost of capital for DIFC using dividend discount model is closest to
a) 8.38%
b) 3.55%
c) 8.55%
Answer C; Remember r= D1/P +g (it is not D0 €“ Do is the last dividend). D1 = D0*(1+g)= $1.365. r= 1.365/38.5+5%=8.55%
CFA Level 1 Question 12
Marc Ltd currently sells 45,000 units of its products. The Price per unit is $7.5 and Total Fixed cost is $101,250. The current operating income is $56,250. The Degree of Operating Leverage for the company is close to
a) 2.3
b) 2.8
c) 2.6
Introduction to Financial Statements - Free Interactive Webinar on July 13, 2013
We are organizing a free interactive webinar on 'Introduction to Financial statements'. This will be useful if you are
a) CFA Level 1 candidate or Aspirant
b) First year MBA student intending to specialize in finance
c) Engineer who wish to make a career in Financial services
d) Wanting to understand financial statements and their inter linkages
Date: July 13, 2013 Saturday
Time: 9 pm IST; 3.30 pm GMT; 10.30 am New York Time.
If interested please register in the below link
CFA Level 1 Question 12
Marc Ltd currently sells 45,000 units of its products. The Price per unit is $7.5 and Total Fixed cost is $101,250. The current operating income is $56,250. The Degree of Operating Leverage for the company is close to
a) 2.3
b) 2.8
c) 2.6
Answer B: Sales – Fixed cost – Variable cost = operating income; variable cost = 45000*7.5 – 101250 – 56250 = 180,000; VC per unit = 180,000/ 45000 = 4
DOL = Units *(Price – Variable cost) / [Units *(Price – Variable cost) – Fixed cost]
45000* (7.5-4) / { 45000 * (7.5-4)-101,250) = 2.8
FinShiksha - Calculating Bond yields from Dirty Price
In the last video we showed calculating bond yield from clean price. This video explains calculating bond yields from dirty prices in excel
CFA Level 1 Question 13
JPM Ltd deposited a total amount of EUR 75,235 in its bank account in the month of January 2013. The average daily float for the company is EUR 3,955. Based on this which of the below conclusion can be arrived at
a) On an average it takes 1.58 days for the checks deposited by JPM to be collected
b) The company's float factor is 0.61
c) On an average it takes 1.63 days for the checks deposited by JPM to be collected
Answer: C; Note it is January 2013, so the month has 31 days. Average daily deposit = 75235/ 31 = EUR 2,427. Float factor = Average daily float/ Average daily deposit; 3955/2427=1.63; Indicating it takes 1.67 days on average to collect checks.
CFA Level 1 Question 14
Raligam Ltd is looking for a short term financing of $75,000 for 1 month. They are evaluating the following options
i) Line of credit (LoC) that costs 7.2% and a commitment of fee of 0.4%.
ii) Banker's acceptance (BA) of 7.6%, all inclusive.
Religam should choose
a) LoC as the cost is 7.6% which lower than BA's cost of 7.65%
b) Either, as both costs 7.6%
c) Either, as both costs 7.65%
CFA Level 1 Question 14
Raligam Ltd is looking for a short term financing of $75,000 for 1 month. They are evaluating the following options
i) Line of credit (LoC) that costs 7.2% and a commitment of fee of 0.4%.
ii) Banker's acceptance (BA) of 7.6%, all inclusive.
Religam should choose
a) LoC as the cost is 7.6% which lower than BA's cost of 7.65%
b) Either, as both costs 7.6%
c) Either, as both costs 7.65%
Answer A: LoC's cost = [75000*(7.2%+0.4%)/12]/ 75000 = 7.6%; Cost of BA = [75000*7.6%/12] /. [75000- (75000*7.6%/12)] = 7.65%;
CFA Level 1 Question 15
Below are the current assets and current liabilities details of Bram Ltd. The acid test ratio of the company is close to
Cash ; 34
Inventory; 55
Short term investments; 32
Accounts Payables; 42
Accounts Receivables; 38
Short Term Borrowings; 21
a) 2.52
b) 1.83
c) 1.65