2016年6月ACCA考试P4高级财务管理真题及答案解析.doc

1、2016年 6月 ACCA考试 P4高级财务管理真题及答案解析(总分：125.00，做题时间：195 分钟)案例分析题(总题数：4，分数：125.00)Section A This ONE question is compulsory and MUST be attemptedLirio Co is an engineering company which is involved in projects around the world. It has been growing steadily for several years and has maintained a stable div

2、idend growth policy for a number of years now. The board of directors (BoD) is considering bidding for a large project which requires a substantial investment of $40 million. It can be assumed that the date today is 1 March 2016.The BoD is proposing that Lirio Co should not raise the finance for the

3、 project through additional debt or equity. Instead, it proposes that the required finance is obtained from a combination of funds received from the sale of its equity investment in a European company and from cash flows generated from its normal business activity in the coming two years. As a resul

4、t, Lirio Cos current capital structure of 80 million $1 equity shares and $70 million 5% bonds is not expected to change in the foreseeable future.The BoD has asked the companys treasury department to prepare a discussion paper on the implications of this proposal. The following information on Lirio

5、 Co has been provided to assist in the preparation of the discussion paper.Expected income and cash flow commitments prior to undertaking the large project for the year to the end of February 2017Lirio Cos sales revenue is forecast to grow by 8% next year from its current level of $300 million, and

6、the operating profit margin on this is expected to be 15%. It is expected that Lirio Co will have the following capital investment requirements for the coming year, before the impact of the large project is considered:1. A $010 investment in working capital for every $1 increase in sales revenue;2.

7、An investment equivalent to the amount of depreciation to keep its non-current asset base at the present productive capacity. The current depreciation charge already included in the operating profit margin is 25% of the non-current assets of $50 million;3. A $020 investment in additional non-current

8、 assets for every $1 increase in sales revenue;4. $8 million additional investment in other small projects.In addition to the above sales revenue and profits, Lirio Co has one overseas subsidiary Pontac Co, from which it receives dividends of 80% on profits. Pontac Co produces a specialist tool whic

9、h it sells locally for $60 each. It is expected that it will produce and sell 400,000 units of this specialist tool next year. Each tool will incur variable costs of $36 per unit and total annual fixed costs of $4 million to produce and sell.Lirio Co pays corporation tax at 25% and Pontac Co pays co

10、rporation tax at 20%. In addition to this, a withholding tax of 8% is deducted from any dividends remitted from Pontac Co. A bi-lateral tax treaty exists between the countries where Lirio Co is based and where Pontac Co is based. Therefore corporation tax is payable on profits made by subsidiary com

11、panies, but full credit is given for corporation tax already paid.It can be assumed that receipts from Pontac Co are in $ equivalent amounts and exchange rate fluctuations on these can be ignored.Sale of equity investment in the European countryIt is expected that Lirio Co will receive Euro () 20 mi

12、llion in three months time from the sale of its investment. The has continued to remain weak, while the $ has continued to remain strong through 2015 and the start of 2016. The financial press has also reported that there may be a permanent shift in the /$ exchange rate, with firms facing economic e

13、xposure. Lirio Co has decided to hedge the receipt using one of currency forward contracts, currency futures contracts or currency options contracts.The following exchange contracts and rates are available to Lirio Co.Required:（分数：50）(1).With reference to purchasing power parity, explain how exchang

14、e rate fluctuations may lead to economic exposure.（分数：6）_(2).Prepare a discussion paper, including all relevant calculations, for the board of directors (BoD) of Lirio Co which:(i) Estimates Lirio Cos dividend capacity as at 28 February 2017, prior to investing in the large project; (9 marks)(ii) Ad

15、vises Lirio Co on, and recommends, an appropriate hedging strategy for the Euro () receipt it is due to receive in three months time from the sale of the equity investment; (14 marks)(iii) Using the information on dividends provided in the question, and from (b) (i) and (b) (ii) above, assesses whet

16、her or not the project would add value to Lirio Co; (8 marks)(iv) Discusses the issues of proposed methods of financing the project which need to be considered further. (9 marks)Professional marks will be awarded in part (b) for the format, structure and presentation of the discussion paper. (4 mark

17、s)（分数：44）_Section B TWO questions ONLY to be attemptedLouieed CoLouieed Co, a listed company, is a major supplier of educational material, selling its products in many countries. It supplies schools and colleges and also produces learning material for business and professional exams. Louieed Co has

18、exclusive contracts to produce material for some examining bodies. Louieed Co has a well-defined management structure with formal processes for making major decisions.Although Louieed Co produces online learning material, most of its profits are still derived from sales of traditional textbooks. Lou

19、ieed Cos growth in profits over the last few years has been slow and its directors are currently reviewing its long-term strategy. One area in which they feel that Louieed Co must become much more involved is the production of online testing materials for exams and to validate course and textbook le

20、arning.Bid for Tidded CoLouieed Co has recently made a bid for Tidded Co, a smaller listed company. Tidded Co also supplies a range of educational material, but has been one of the leaders in the development of online testing and has shown strong profit growth over recent years. All of Tidded Cos in

21、itial five founders remain on its board and still hold 45% of its issued share capital between them. From the start, Tidded Cos directors have been used to making quick decisions in their areas of responsibility. Although listing has imposed some formalities, Tidded Co has remained focused on acting

22、 quickly to gain competitive advantage, with the five founders continuing to give strong leadership.Louieed Cos initial bid of five shares in Louieed Co for three shares in Tidded Co was rejected by Tidded Cos board. There has been further discussion between the two boards since the initial offer wa

23、s rejected and Louieed Cos board is now considering a proposal to offer Tidded Cos shareholders two shares in Louieed Co for one share in Tidded Co or a cash alternative of $2275 per Tidded Co share. It is expected that Tidded Cos shareholders will choose one of the following options:(i) To accept t

24、he two-shares-for-one-share offer for all the Tidded Co shares; or,(ii) To accept the cash offer for all the Tidded Co shares; or,(iii) 60% of the shareholders will take up the two-shares-for-one-share offer and the remaining 40% will take the cash offer.In case of the third option being accepted, i

25、t is thought that three of the companys founders, holding 20% of the share capital in total, will take the cash offer and not join the combined company. The remaining two founders will probably continue to be involved in the business and be members of the combined companys board.Louieed Cos finance

26、director has estimated that the merger will produce annual post-tax synergies of $20 million. He expects Louieed Cos current price-earnings (P/E) ratio to remain unchanged after the acquisition.Extracts from the two companies most recent accounts are shown below:The tax rate applicable to both compa

27、nies is 20%Assume that Louieed Co can obtain further debt funding at a pre-tax cost of 75% and that the return on cash surpluses is 5% pre-tax.Assume also that any debt funding needed to complete the acquisition will be reduced instantly by the balances of cash and cash equivalents held by Louieed C

28、o and Tidded Co.Required:（分数：25）(1).Discuss the advantages and disadvantages of the acquisition of Tidded Co from the viewpoint of Louieed Co.（分数：6）_(2).Calculate the P/E ratios of Tidded Co implied by the terms of Louieed Cos initial and proposed offers, for all three of the above options（分数：5）_(3)

29、.Calculate, and comment on, the funding required for the acquisition of Tidded Co and the impact on Louieed Cos earnings per share and gearing, for each of the three options given above.Note: Up to 10 marks are available for the calculations.（分数：14）_Staple Group is one of Barlands biggest media grou

30、ps. It consists of four divisions, organised as follows: Staple National the national newspaper, the Daily Staple. This divisions revenues and operating profits have decreased for the last two years. Staple Local a portfolio of 18 local and regional newspapers. This divisions operating profits have

31、fallen for the last five years and operating profits and cash flows are forecast to be negative in the next financial year. Other newspaper groups with local titles have also reported significant falls in profitability recently. Staple View a package of digital channels showing sporting events and p

32、rogrammes for a family audience. Staple Groups board has been pleased with this divisions recent performance, but it believes that the division will only be able to sustain a growth rate of 4% in operating profits and cash flows unless it can buy the rights to show more major sporting events. Over t

33、he last year, Staple Views biggest competitor in this sector has acquired two smaller digital broadcasters.Staple Investor established from a business which was acquired three years ago, this division offers services for investors including research, publications, training events and conferences. Th

34、e division gained a number of new clients over the last year and has thus shown good growth in revenues and operating profits.Some of Staple Groups institutional investors have expressed concern about the fall in profitability of the two newspaper divisions.The following summarised data relates to t

35、he groups last accounting year. The % changes in pre-tax profits and revenues are changes in the most recent figures compared with the previous year.Staple Groups board regards the Daily Staple as a central element of the groups future. The directors are currently considering a number of investment

36、plans, including the development of digital platforms for the Daily Staple. The finance director has costed the investment programme at $150 million. The board would prefer to fund the investment programme by disposing parts or all of one of the other divisions. The following information is availabl

37、e to help assess the value of each division: One of Staple Groups competitors, Postway Co, has contacted Staple Groups directors asking if they would be interested in selling 15 of the local and regional newspapers for $60 million. Staple Groups finance director believes this offer is low and wishes

38、 to use the net assets valuation method to evaluate a minimum price for the Staple Local division. Staple Groups finance director believes that a valuation using free cash flows would provide a fair estimate of the value of the Staple View division. Over the last year, investment in additional non-c

39、urrent assets for the Staple View division has been $125 million and the incremental working capital investment has been $62 million. These investment levels will have to increase at 4% annually in order to support the expected sustainable increases in operating profit and cash flow. Staple Groups f

40、inance director believes that the valuation of the Staple Investor division needs to reflect the potential it derives from the expertise and experience of its staff. The finance director has calculated a value of $1185 million for this division, based on the earnings made last year but also allowing

41、 for the additional earnings which he believes that the expert staff in the division will be able to generate in future years.Assume a risk-adjusted, all-equity financed, cost of capital of 12% and a tax rate of 30%. Goodwill should be ignored in any calculations.Staple Groups finance and human reso

42、urces directors are looking at the staffing of the two newspaper divisions. The finance director proposes dismissing most staff who have worked for the group for less than two years, two years employment being when staff would be entitled to enhanced statutory employment protection. The finance dire

43、ctor also proposes a redundancy programme for longer-serving staff, selecting for redundancy employees who have complained particularly strongly about recent changes in working conditions. There is a commitment in Staple Groups annual report to treat employees fairly, communicate with them regularly

44、 and enhance employees performance by structured development.Required:（分数：25）(1).Evaluate the options for disposing of parts of Staple Group, using the financial information to assess possible disposal prices. The evaluation should include a discussion of the benefits and drawbacks to Staple Group f

45、rom disposing of parts of the Staple Group.（分数：19）_(2).Discuss the significance of the finance directors proposals for reduction in staff costs for Staple Groups relationships with its shareholders and employees and discuss the ethical implications of the proposals.（分数：6）_Furlion Co manufactures hea

46、vy agricultural equipment and machinery which can be used in difficult farming conditions. Furlion Cos chief executive has been investigating a significant opportunity in the country of Naswa, where Furlion Co has not previously sold any products. The government of Naswa has been undertaking a major

47、 land reclamation programme and Furlion Cos equipment is particularly suitable for use on the reclaimed land. Because of the costs and other problems involved in transporting its products, Furlion Cos chief executive proposes that Furlion Co should establish a plant for manufacturing machinery in Naswa. He knows that the Naswan government is keen to encourage the development of sustainable businesses within the country.Initial calculations suggest that the proposed investment in Naswa would ha