2012年ACCA考试模拟试题第二节

　　Section B–TWO questions ONLY to be attempted

　　3 The treasury division of Marengo Co,a large quoted company,holds equity investments in various companies around the world.One of the investments is in Arion Co,in which Marengo holds 200，000 shares,which is around 2% of the total number of Arion Co's shares traded on the stock market.Over the past year,due to the general strength in the equity markets following optimistic predictions of the performance of world economies,Marengo’s investments have performed well.However,there is some concern that the share price of Arion Co may fall in the coming two months due to uncertainty in its markets.It is expected that any fall in share prices will be reversed following this period of uncertainty.

　　The treasury division managers in Marengo,Wenyu,Lola and Sam,held a meeting to discuss what to do with the investment in Arion Co and they each made a different suggestion as follows:

　　1.Wenyu was of the opinion that Marengo's shareholders would benefit most if no action were taken.He argued that the courses of action proposed by Lola and Sam,below,would result in extra costs and possibly increase the risk to Marengo Co.

　　2.Lola proposed that Arion Co's shares should be sold in order to eliminate the risk of a fall in the share price.

　　3.Sam suggested that the investment should be hedged using an appropriate derivative product.

　　Although no exchange-traded derivative products exist on Arion Co's shares,a bank has offered over-the-counter （OTC）option contracts at an exercise price of 350 cents per share in a contract size of 1，000 shares each,for the appropriate time period.Arion Co's current share price is 340 cents per share,although the volatility of the share prices could be as high as 40%.

　　It can be assumed that Arion Co will not pay any dividends in the coming few months and that the appropriate inter-bank lending rate will be 4% over that period.

　　Required:

　　（a）Estimate the number of OTC put option contracts that Marengo Co will need to hedge against any adverse movement in Arion Co's share price.Provide a brief explanation of your answer.Note: You may assume that the delta of a put option is equivalent to N（–d1）（7 marks）

　　（b）Discuss possible reasons for the suggestions made by each of the three managers.（13 marks）

　　（20 marks）

　　4 Lamri Co （Lamri），a listed company,is expecting sales revenue to grow to $80 million next year,which is an increase of 20% from the current year.The operating profit margin for next year is forecast to be the same as this year at 30% of sales revenue.In addition to these profits,Lamri receives 75% of the after-tax profits from one of its wholly owned foreign subsidiaries–Magnolia Co （Magnolia），as dividends.However,its second wholly owned foreign subsidiary–Strymon Co（Strymon）does not pay dividends.

　　Lamri is due to pay dividends of $7.5 million shortly and has maintained a steady 8% annual growth rate in dividends over the past few years.The company has grown rapidly in the last few years as a result of investment in key projects and this is likely to continue.

　　For the coming year it is expected that Lamri will require the following capital investment.

　　1.An investment equivalent to the amount of depreciation to keep its non-current asset base at the present productive capacity.Lamri charges depreciation of 25% on a straight-line basis on its non-current assets of $15 million.This charge has been included when calculating the operating profit amount.

　　2.A 25% investment in additional non-current assets for every $1 increase in sales revenue.

　　3.$4.5 million additional investment in non-current assets for a new project.

　　Lamri also requires a 15% investment in working capital for every $1 increase in sales revenue.

　　Strymon produces specialist components solely for Magnolia to assemble into finished goods.Strymon will produce 300，000 specialist components at $12 variable cost per unit and will incur fixed costs of $2.1 million for the coming year.It will then transfer the components to Magnolia at full cost price,where they will be assembled at a cost of $8 per unit and sold for $50 per unit.Magnolia will incur additional fixed costs of $1.5 million in the assembly process.

　　Tax-Ethic （TE）is a charitable organisation devoted to reducing tax avoidance schemes by companies operating in poor countries around the world.TE has petitioned Lamri's Board of Directorhttp://www.100ksw.com/s to reconsider Strymon’s policy of transferring goods at full cost.TE suggests that the policy could be changed to cost plus 40% mark-up.If Lamri changes Strymon's policy,it is expected that Strymon would be asked to remit 75% of its after-tax profits as dividends to Lamri.

　　Other Information

　　1.Lamri's outstanding non-current liabilities of $35 million,on which it pays interest of 8% per year,and its 30 million $1 issued equity capital will not change for the coming year.

　　2.Lamric's,Magnolia’s and Strymon's profits are taxed at 28%,22% and 42% respectively.A withholding tax of 10% is deducted from any dividends remitted from Strymon.

　　3.The tax authorities where Lamri is based charge tax on profits made by subsidiary companies but give full credit for tax already paid by overseas subsidiaries.

　　4.All costs and revenues are in $ equivalent amounts and exchange rate fluctuations can be ignored.

　　Required:

　　（a）Calculate Lamri's dividend capacity for the coming year prior to implementing TE’s proposal and after implementing the proposal.（14 marks）

　　（b）Comment on the impact of implementing TE's proposal and suggest possible actions Lamri may take as a result.（6 marks）

　　（20 marks）

　　5 Prospice Mentis University （PMU） is a prestigious private institution and a member of the Holly League,which is made up of universities based in Rosinante and renowned worldwide as being of the highest quality.Universities in Rosinante have benefited particularly from students coming from Kantaka,and PMU has been no exception.However，PMU has recognised that Kantaka has a large population of able students who cannot afford to study overseas.Therefore it wants to investigate how it can offer some of its most popular degree programmes in Kantaka,where students will be able to study at a significantly lower cost.It is considering whether to enter into a joint venture with a local institution or to independently set up its own university site in Kantaka.

　　Offering courses overseas would be a first from a Holly League institution and indeed from any academic institution based in Rosinante.However,there have been less renowned academic institutions from other countries which have formed joint ventures with small private institutions in Kantaka to deliver degree programmes.These have been of low quality and are not held in high regard by the population or the government of Kantaka.

　　In Kantaka,government run universities and a handful of large private academic institutions,none of which have entered into joint ventures,are held in high regard.However,the demand for places in these institutions far outstrips the supply of places and many students are forced to go to the smaller private institutions or to study overseas if they can afford it.

　　After an initial investigation the following points have come to light:

　　1.The Kantaka government is keen to attract foreign direct investment （FDI） and offer tax concessions to businesses which bring investment funds into the country.It is likely that PMU would need to borrow a substantial amount of money if it were to set up independently.However,the investment funds required would be considerably smaller if it went into a joint venture.

　　2.Given the past experiences of poor quality education offered by joint ventures between small local private institutions and overseas institutions,the Kantaka government has been reluctant to approve degrees from such institutions.Also the government has not allowed graduates from these institutions to work in national or local government,or in nationalised organisations.

　　3.Over the past two years the Kantaka currency has depreciated against other currencies,but economic commentators believe that this may not continue for much longer.

　　4.A large proportion of PMU‘s academic success is due to innovative teaching and learning methods,and high quality research.The teaching and learning methods used in Kantaka’s educational institutions are very different.Apart from the larger private and government run universities,little academic research is undertaken elsewhere in Kantaka‘s education sector.

　　Required:

　　Discuss the benefits and disadvantages of PMU entering into a joint venture instead of setting up independently in Kantaka.As part of your discussion,consider how the disadvantages can be mitigated and the additional information PMU needs in order to make its decision.

　　（20 marks）