Discounted Cash Flow (DCF) Model Exam – Wall Street Prep 2026 | Full Solutions & Step-by-Step Valuation

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Discounted Cash Flow Model Exam Wall
Street Prep 2026




2026 2027 GRADED A+

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1. The primary purpose of a DCF is to:
A) Determine historical performance
B) Estimate the present value of future cash flows
C) Calculate EBITDA only
D) Forecast revenue only
Answer: B

2. Free Cash Flow to the Firm (FCFF) represents:
A) Cash available to equity and debt holders
B) Cash only for equity holders
C) Net income after dividends
D) Operating cash flow minus interest
Answer: A

3. Free Cash Flow to Equity (FCFE) represents:
A) Cash available only to equity holders after debt payments
B) Cash for debt holders only
C) Revenue minus COGS
D) EBITDA minus CapEx
Answer: A

4. Which is not a key input in a DCF model?
A) Revenue forecast
B) Tax rate
C) Terminal value
D) Number of employees
Answer: D

5. Terminal value can be calculated using:
A) Gordon Growth Model or Exit Multiple Method
B) Only EBITDA
C) Net debt
D) Revenue minus CapEx
Answer: A

6. The discount rate in a DCF is generally:
A) WACC
B) Cost of goods sold
C) Revenue growth rate
D) Net income
Answer: A

7. Unlevered DCF uses:
A) FCFF
B) FCFE
C) Net income


2026 2027 GRADED A+