Hi, I have recently been doing the past paper for September 2012, question 1 ii, the answer talks a lot about Embedded value. However when I initially tried this question I focused more on the assumptions required and how to generate them and relevent data sources. Does the solutions focus more on EV because it is an older exam and there is now less focus on EV or should a company valuation question still include EV? Thanks!
The question asks "describe how it would place a value on the target company" so the answer describes the whole modelling process, including data, assumptions and cashflow projection. A current answer could still mention EV as it is still part of the course but it may be more explicit if it was looking for you to describe how the value would be calculated using EV rather than using a Solvency II basis. As you say, there is less significance on EV reporting now. Hope this helps, Sarah
