Any difficulties ppl found on the FSA/Corp Fin section… I found the technical default one tricky as well as the DTA and DTL and its relation to equity.
the technical default was tricky…company is not in technical default if the interest coverage rises.
When it comes to technical default – creditors want to see lower D/E ratios and higher EBIT/I interest coverage ratios. So I can’t imagine a EBIT/I ratio higher than the threshold being a techinal default
I thought that the technical default question was a gimme. There were a few tricky Corp Fin ones though.
when tax rates increase, the company with the largest net DTA will have the largest increase in equity because DTL and DTA are growing in proportion to each other
finance03 Wrote: ------------------------------------------------------- > when tax rates increase, the company with the > largest net DTA will have the largest increase in > equity because DTL and DTA are growing in > proportion to each other agreed. There was a similar question on one of the practice exams.
I marked the one with the largest difference between DTA and DTL.
Is that correct?
yes, where DTA > DTL
i.e. largest DTA - DTL Guys, was that correct? I figured that for such a company NI would increase the most and that would reflect on equity.
Does anyone remember the qt on two companies with same ROTA, ROTC etc… What was the answer to that?
Conceptual question if the ROE is the same; and ROA is the same, and one has a higher gross profit, then the asset turnover must be lower to keep ROA constant between the two companies. (ROE = ROA*A/E
That was C? I think I marked that… man it’s so hard to remember what I marked on the exam given that I went there with 5 hours of sleep on average for the last week before the exam!
Lola, you seem to know all the answers… I’m sure your passing the exam. Good job! And, thanks for all the help with the posts here
no worries. I’m not so sure I’ll pass, but we’ll see.
Any other qts that anyone found crazy hard in FSA/Corp Fin?
was the answer to one of the CFA qts 7 million … the one where REbeg and REend was given?
Sorry, I meant CFO
i remember getting the ‘which is not a type of project’ question wrong in CF. i picked safety when the right answer was financing. stupid stupid stupid.
There was a question on SML – I think I got it to be undervalued and above the line. Do you guys remember? dennis2085 – Now that you mention that question, I can’t seem to remember what I bubbled in