CMA Final Paper 14 (SFM) study plan

Build a one-page valuation toolkit sheet listing FCFF, FCFE, DDM, residual income and relative-multiple formulas, with the exact definition of each input (e.g. what discount rate pairs with which cash flow).

Work through 12 numerical valuation problems covering two-stage DDM and constant-growth FCFF, computing terminal value with both the Gordon growth and exit-multiple approaches and reconciling the difference.

Derive the relationship between ROE, retention ratio and sustainable growth, and test it against three listed-company examples you source yourself, noting where the model breaks down.

Draft a checklist of valuation adjustments: minority interest, leases, capitalised R&D, contingent liabilities and surplus assets, with the direction of each adjustment.

Compute and interpret the full CAPM, APT and Fama-French inputs for a single stock, showing how beta is estimated and what estimation window and return interval you would defend.

Calculate portfolio return, variance and Sharpe ratio for a 3-asset portfolio at three correlation assumptions, and state the diversification conclusion each time.

Apply the Markowitz efficient frontier logic to explain why the market portfolio is the tangency point, and reproduce the CML and SML equations from memory.

Evaluate a mutual fund's performance using Treynor, Sharpe, Jensen's alpha and information ratio, and explain why the four can rank the same fund differently.

Price forwards, futures and plain-vanilla options using cost-of-carry and Black-Scholes, and verify put-call parity numerically on one worked example.

Compute and interpret the Greeks for a single option position, explaining what each measures and how a delta-hedge would be rebalanced.

Outline the mechanics of an asset securitisation: SPV, true sale, credit enhancement, tranching and waterfall, and identify who bears prepayment and default risk at each tranche.

Build a simple interest-rate swap and a currency swap cash-flow schedule and compute the net settlement for one period.

Map a corporate exposure to the correct derivative instrument and justify the hedge ratio chosen.

Articulate how financial policy (capital structure, dividend policy, investment appraisal hurdle rates) links to corporate strategy, and argue both sides of the dividend irrelevance debate with the assumptions stated.

Compute WACC under three capital structure scenarios and show the effect of changing leverage on the cost of equity via the levered-beta formula.

Compare NPV, IRR, MIRR, payback and discounted payback on a single project where they conflict, and justify the decision rule you would defend.

Classify five real takeover cases by deal type (horizontal, vertical, conglomerate, leveraged buyout) and by consideration structure (cash, stock, mixed), and compute the accretion/dilution impact on EPS for one of them.

Value synergy in a merger using the incremental-cash-flow method and reconcile it with the premium paid, stating who captures the synergy.

Compute the exchange ratio in a stock-for-stock merger under both the pre-merger and post-merger price bases, and explain the bootstrapping effect on EPS.

Explain the mechanics of a demerger, spin-off, split-off and equity carve-out, and state the tax and control consequences of each.

Build a venture-capital method valuation: pre-money, post-money, option pool, dilution across two rounds, and the exit proceeds to founders versus investors.

Compare VC, private equity buyout and angel financing on governance rights, liquidation preference, anti-dilution and exit route.

Distinguish transaction, translation and economic exposure with a concrete example of each for an exporting firm, and state which hedging tool addresses which.

Compute forward premium/discount from interest rate differentials using covered interest parity and check the result against a quoted forward rate.

Work through purchasing power parity and the international Fisher effect numerically, and explain why they fail in the short run.

Price and evaluate a money-market hedge, a forward hedge, a currency futures hedge and a currency option hedge for the same receivable, and rank them by outcome under two exchange-rate scenarios.

Explain how a currency swap and a natural hedge (matching revenue and cost currency) reduce translation exposure on consolidated accounts.

Compute the NPV of a foreign direct investment in the parent's home currency using both the home-currency and foreign-currency approaches, and show the two agree.

Apply the adjusted present value method to a foreign project with concessional financing and quantify the subsidy benefit.

Explain the cost of capital for a multinational: country risk premium, segmented versus integrated market betas, and the treatment of withholding tax.

Assess political, sovereign and transfer risks in a cross-border project, and list the mitigation instruments available (guarantees, political risk insurance, structuring).

Analyse how transfer pricing and remittance restrictions alter the cash flows that actually reach the parent.

Sit two timed full-length mock papers under exam conditions, marking strictly against the model answers and recording every lost mark by domain.

Re-derive from memory the 20 formulas you flagged as weakest, and re-solve the three problem types that produced the most errors.

Practise written-answer structure for the discursive sections: define, apply to the scenario, conclude with a recommendation, within the time budget.

Review your error log and confirm no domain has more than two unresolved weak points.