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IP question 5 and question 4

Discussion in 'Financial Planning Study Group' started by johnluo721, 25th Apr, 2010.

  1. johnluo721

    johnluo721 Active Member

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    sydney
    I already finished these two question, however I am not very confidence at my answers.
    In question 4, it ask why different rate used for culculation of DCF.
    my answer focs on, discont rate may need to take account of cost of capital, inflation.

    In question 5 part c, it ask about general and company specific factors,and performance drivers specific to wooli
    my answer mentioned about interest rate, takeover threat, management.
    regarding to performance driver,
    I mentioned about stability of earning, company's ability to take advantage of opportunity, industry sector.
    Is my answer sufficient? is there any thing I need to discuss about issue?
     
  2. serge g

    serge g Active Member

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    VIC
    I don't think they want too much detail here john, just an awareness of what the potential influences on performance are - sounds like you've got it covered.
     
  3. johnluo721

    johnluo721 Active Member

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    Thanks Serge g for confirm that.
     
  4. Jennylichen

    Jennylichen Member

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    14th Mar, 2009
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    Location:
    Sydney, NSW
    Hi John
    Do you recommend that they keep or sell WOW?
    From the calcuation, I though they should sell wow shares, but I am not sure.
     
  5. johnluo721

    johnluo721 Active Member

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    yes, since the share are overvalued, I sugguest them to sell the WOW share. however, u need to explain why
     
  6. gocats

    gocats Well-Known Member

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    Geelong, Victoria
    hi john, can you confirm the calculations you used for a & b of question 5, just want to make sure I'm on the right track