ACCA考试P7每日一练(2019-01-04)

正确答案：

正确答案：
(b)(i)Price/earningsratiomethodEarningspershareofNGN=80cpersharePrice/earningsratioofKFPCo=8SharepriceofNGN=80x8=640cor$6·40NumberofordinarysharesofNGN=5/0·5=10millionsharesValueofNGN=6·40x10m=$64millionHowever,itcanbearguedthatareductionintheappliedprice/earningsratioisneededasNGNisunlistedandthereforeitssharesaremoredifficulttobuyandsellthanthoseofalistedcompanysuchasKFPCo.Ifwereducetheappliedprice/earningsratioby10%(othersimilarpercentagereductionswouldbeacceptable),itbecomes7·2timesandthevalueofNGNwouldbe(80/100)x7·2x10m=$57·6million(ii)DividendgrowthmodelDividendpershareofNGN=80cx0·45=36cpershareSincethepayoutratiohasbeenmaintainedforseveralyears,recentearningsgrowthisthesameasrecentdividendgrowth,i.e.4·5%.Assumingthatthisdividendgrowthcontinuesinthefuture,thefuturedividendgrowthratewillbe4·5%.Sharepricefromdividendgrowthmodel=(36x1·045)/(0·12–0·045)=502cor$5·02ValueofNGN=5·02x10m=$50·2million(c)Adiscussionofcapitalstructurecouldstartfromrecognisingthatequityismoreexpensivethandebtbecauseoftherelativeriskofthetwosourcesoffinance.Equityisriskierthandebtandsoequityismoreexpensivethandebt.Thisdoesnotdependonthetaxefficiencyofdebt,sincewecanassumethatnotaxesexist.Wecanalsoassumethatasacompanygearsup,itreplacesequitywithdebt.Thismeansthatthecompany’scapitalbaseremainsconstantanditsweightedaveragecostofcapital(WACC)isnotaffectedbyincreasinginvestment.Thetraditionalviewofcapitalstructureassumesanon-linearrelationshipbetweenthecostofequityandfinancialrisk.Asacompanygearsup,thereisinitiallyverylittleincreaseinthecostofequityandtheWACCdecreasesbecausethecostofdebtislessthanthecostofequity.Apointisreached,however,wherethecostofequityrisesataratethatexceedsthereductioneffectofcheaperdebtandtheWACCstartstoincrease.Inthetraditionalview,therefore,aminimumWACCexistsand,asaresult,amaximumvalueofthecompanyarises.ModiglianiandMillerassumedaperfectcapitalmarketandalinearrelationshipbetweenthecostofequityandfinancialrisk.Theyarguedthat,asacompanygearedup,thecostofequityincreasedataratethatexactlycancelledoutthereductioneffectofcheaperdebt.WACCwasthereforeconstantatalllevelsofgearingandnooptimalcapitalstructure,wherethevalueofthecompanywasatamaximum,couldbefound.Itwasarguedthattheno-taxassumptionmadebyModiglianiandMillerwasunrealistic,sinceintherealworldinterestpaymentswereanallowableexpenseincalculatingtaxableprofitandsotheeffectivecostofdebtwasreducedbyitstaxefficiency.Theyrevisedtheirmodeltoincludethistaxeffectandshowedthat,asaresult,theWACCdecreasedinalinearfashionasacompanygearedup.Thevalueofthecompanyincreasedbythevalueofthe‘taxshield’andanoptimalcapitalstructurewouldresultbygearingupasmuchaspossible.Itwaspointedoutthatmarketimperfectionsassociatedwithhighlevelsofgearing,suchasbankruptcyriskandagencycosts,wouldlimittheextenttowhichacompanycouldgearup.Inpractice,therefore,itappearsthatcompaniescanreducetheirWACCbyincreasinggearing,whileavoidingthefinancialdistressthatcanariseathighlevelsofgearing.Ithasfurtherbeensuggestedthatcompanieschoosethesourceoffinancewhich,foronereasonoranother,iseasiestforthemtoaccess(peckingordertheory).Thisresultsinaninitialpreferenceforretainedearnings,followedbyapreferencefordebtbeforeturningtoequity.TheviewsuggeststhatcompaniesmaynotinpracticeseektominimisetheirWACC(andconsequentlymaximisecompanyvalueandshareholderwealth).TurningtothesuggestionthatdebtcouldbeusedtofinanceacashbidforNGN,thecurrentandpostacquisitioncapitalstructuresandtheirrelativegearinglevelsshouldbeconsidered,aswellastheamountofdebtfinancethatwouldbeneeded.Earliercalculationssuggestthatatleast$58mwouldbeneeded,ignoringanypremiumpaidtopersuadetargetcompanyshareholderstoselltheirshares.Thecurrentdebt/equityratioofKFPCois60%(15m/25m).Thedebtofthecompanywouldincreaseby$58minordertofinancethebidandbyafurther$20maftertheacquisition,duetotakingontheexistingdebtofNGN,givingatotalof$93m.Ignoringotherfactors,thegearingwouldincreaseto372%(93m/25m).KFPCowouldneedtoconsiderhowitcouldservicethisdangerouslyhighlevelofgearinganddealwiththesignificantriskofbankruptcythatitmightcreate.ItwouldalsoneedtoconsiderwhetherthebenefitsarisingfromtheacquisitionofNGNwouldcompensateforthesignificantincreaseinfinancialriskandbankruptcyriskresultingfromusingdebtfinance.

正确答案：
(b) Need to analyse the group structure
A certain amount of analysis of the group structure will be undertaken before an auditor accepts the role of group auditor,
particularly if the auditor is not directly responsible for the whole group.
An analysis of the group structure is necessary to:
■ ensure that particular attention is given to the more unusual aspects of corporate structures (e.g. partnership
arrangements that may be a joint venture, components in tax havens, shell companies and horizontal groups);
■ arrange access to information relating to all ‘significant’ components (i.e. those representing 20% or more of group
assets, liabilities, cash flows, profit or revenue), on a timely basis;
■ identify the applicable financial reporting framework for each component and any local statutory reporting requirements;
■ plan work to deal with different accounting frameworks/policies applied throughout the group and differences between
International Auditing Standards (ISAs) and national standards;
■ integrate the group audit process effectively with local statutory audit requirements;
■ identify related parties and effectively audit the completeness of disclosures in the group accounts in accordance with
IAS 24 Related Party Disclosures.
Any doubts about the group structure will need to be clarified against publicly available information as soon as possible to
ensure an effective audit of the relevant components (i.e. subsidiaries, associates and joint ventures). The auditor can then
plan the level of assurance required on each component well in advance of the year end.
Having established thoroughly the group structure from the outset the auditor will then need only to update the structure for
changes year-on-year.