CMA Part 2 Extensive Review Section E Essay 1

[@nageshwadi3686]

in question 4 risk premium is already given and not market return rate hence coc is supposed to be 40%. i.e. risk premium 15% * 2 beta + 10% risk free rate= 40%..

[@FTCGlobal]

You are right. That was my mistake there.

[@avantikakesarwani2015]

In question 5, we won't use discounted pay back method to calculate payback period for project X?

[@anujrally2697]

Sir, please explain why here we considered the Market Risk Premium as the Market Rate of Return?
It should be 10%+2*15% but we took 10%+2*15%-10%.

[@shivanimehta76]

Sir while calculating depreciation are you supposed to add wc in initial investment or deduct any sale or salvage value

[@FTCGlobal]

Don't do either. Just divide cost of the asset over its useful life

[@eldasmm3621]

Would the calculation for debt cost be different if the bonds don’t mature next year?

[@FTCGlobal]

Yes

[@arthemis_creations]

Sir is the calculation of debt different in this question? .......

[@naiyapatel99]

sir, im doing US CMA form miles education . my question is that SECION - D & F are not compulsory for essay question in exam because they are theory sections so i have to prepare D & F section ? i check out your all videos you are make video for SECTION - D & F .
Regards , naiya patel

[@FTCGlobal]

Essay exam could be based on any section or combinations of sections. Do everything. Leave nothing

[@gauravjain3424]

Shouldn't we take expected market rate of return in CAPM instead of risk premium sir?

[@FTCGlobal]

Risk premium already includes Rm in computation so no need to consider it separately

[@gauravjain3424]

@@FTCGlobal okay sir can you please tell what's the formula for Risk premium? Is it Rm + risk free rate?

[@FTCGlobal]

Risk premium = Beta(Rm - Rf)

[@Akashroy-bh7dc]

Sir I have one doubt in xam will there will be annuity table and excel sheet?

[@FTCGlobal]

Annuity table would be available on testing screen. However, no excel

[@jaygopalkrishna7470]

Q 2.4