AM - manageable, PM - madness. Agreed?

CFA Level II
#21

Equities PM Session (1 Vignette, glass/cement company): 1. Intrinsic PE = 17.6??? 2. Company claims profits because of barriers to entry 3. 343 equal sized companies 4. 75% inflation passthrough = p/e of??? 5. Cyclical industry 6. Cost differentiation would lead to bad future outlook

#22

The stock is overvalued relative to market not to the target company. So I changed my answer to “cofidence” And, The acquirer was offering with cash because they were quite confident about its synergy effect

#23

343 equal sized companies, barriers to entry for value, cyclical industry

#24

Got 105 here too. Gain to the target.

#25

I was so happy during lunch time after the AM session. I had to force out so many guesses (usually eliminating 1 or 2 obviously wrong choices) during the PM. Kinda upset since some of the topics felt like they weren’t emphasized in the material, yet were the ones being tested on instead of the bigger topics. No ABS, no DOL/DFL, no basic stock options. no FRA, etc etc.

#26

the problem with cost leadership is losing differntiation proximity

#27

mto1985 Wrote: ------------------------------------------------------- > Equities PM Session (1 Vignette, glass/cement > company): > > 1. Intrinsic PE = 17.6??? > 2. Company claims profits because of barriers to > entry > 3. 343 equal sized companies > 4. 75% inflation passthrough = p/e of??? > 5. Cyclical industry > 6. Cost differentiation would lead to bad future > outlook 1. Agree 2. Agree 3. nX(1/N2) = 0.00032 so 1/n = 0.00032, N = 312 (Something like this) 4. agree 5. can’t remmmeber

#28

1 10.9 intrinsic p/e 2 barriers to entry y 3 313 equal sized (343 was not an option on my form… were there diff forms?) 4 7.1 ipt p/e 5 cyclical yup 6 i put proximity to diff as they were a cost leader and need to maintain diff parity

#29

is it not that the current value of the companies were 2245 (495 + 1750). The new shares outstanding are 47 million (35 + 12 (15*0.8)). If you divide 2245/47 = 47.8*12million = 573.2 - that is what Target Shareholders receive. The value of the company was 495, therefore the gain for shareholders were 78 (573.2 - 495)… but honestly if I got the question right or wrong will not make a difference…

#30

damn i got 125 equal sized companies. i thought that was a sure thing. i must have mixed up the herfandahl and the N firm concentration

#31

drexi, that sounds right. i knew i was doing something wrong. you nailed it i think.

#32

Slash Wrote: ------------------------------------------------------- > damn i got 125 equal sized companies. i thought > that was a sure thing. i must have mixed up the > herfandahl and the N firm concentration me too i thought market share for fist 50 was 40%

#33

sorry it was 312, or whatever the 3++ number was

#34

313, no 343 in the options…

#35

if we talk about the same question set no.2 was supplier contracts (not barriers to entry). It said that the company had individual suppliers and in the industry section of the report they said that supplier power is high. Therefore, competitive advantage for the company…

#36

drexi that is right - most people missed it

#37

that metal recycling company question was sweet. they told you right there in the vignette that the barriers to entry was high.

#38

at least one;-)

#39

I guessed on the herfindahl index question :slight_smile: I think I got it right too :slight_smile:

#40

why was it 3…something. I though 100% divided by 250 - squared and times 250 has to equal 40%…