the last item set… In the answer it has a change in MVA for $1.5 for 2007 (figure 3). Shouldn’t the change in MVA be 1.25??? Going from (850) to 400 --> 1,250??? what am I missing here?
errata- nice, right? give yourself the point(s) Page: 179 - Omission The last part of the vignette for Questions 55 - 60 related to Wayland and Optimax was inadvertently left out. The vignette should end with, “Vanry paid dividends of $1 per share on various dates in November of 2005, 2006, and 2007.” Posted: 2008-05-04
Hey Banni, thanks but I did refer to errata and made the updates – but if you look in the answer in figure 3 I don’t think the divs will have an impact on the change in MVA. I’m glad I checked the errata or else I would still be trying to find the tax rate/wacc for the Cap Budgeting question…
3_letters Wrote: ------------------------------------------------------- > Hey Banni, thanks but I did refer to errata and > made the updates – but if you look in the answer > in figure 7 I don’t think the divs will have an > impact on the change in MVA. > > I’m glad I checked the errata or else I would > still be trying to find the tax rate/wacc for the > Cap Budgeting question… WTF!!!.. i struggled with these two questions, probably for 90 of the 180 minutes (and the real estate Q, but i digress)… could not figure out how my MVA answer was off… capital budgeting i was somewhat lost anyway, but i sure wondered why there was no WACC… any other erratum??
3 letters- sorry, didn’t read your q well then. in 2007, what you had was the 20k shrs that went from 30 to 85 so that’s $55 x 20k = 1.1 mil PLUS the 10k you bought at 45 that went to 85 so $40 x 10k shrs = 400k. 1.1 mil plus 400k = 1.5 mil. or if you like the way they do it with the chart, you’d do 400k - (-1.1 mil) b/c you do the MVA from 2007 minus MVA from 2006 to get the MVA. however you like to do it, i’m down with their 1.5 mil # there.
I must be burnt out. I was trying to reconcile the CHANGE in MVA rather the MVA…brutal. Thank you Banni…