M&A Merger Models 2024/2025 Exam
Questions and Corresponding Answers
with Surety of 100% Pass Mark
How can you think about calculating combined equity value? - 🧠ANSWER
✔✔if no Stock is used, Combined Equity Value = Company A's Equity
Value.
If it's a 100% Stock deal, Combined Equity Value = Company A's Equity
Value + Company B's Purchase Equity Value.
How can you think about calculating combined enterprise value? -
🧠ANSWER ✔✔Combined Enterprise Value = Acquirer's Current Enterprise
Value + Seller's Purchase Enterprise Value
Equal to the Combined Equity Value, plus the Debt (and other Debt-like
Liabilities), minus the Cash (and other non-core-business Assets) of the
Combined Company... including the Cash or Debt used to fund the deal.
Where will combined multiples roughly end up? - 🧠ANSWER ✔✔The
Combined Multiples will be in between the Acquirer's multiples and Target's
purchase multiples.
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, How does purchase method effect combined Enterprise Value-Based
Multiples? - 🧠ANSWER ✔✔These will not change regardless of the
purchase method because the Combined Enterprise Value isn't affected by
the purchase method, and neither are metrics like Revenue, EBIT, or
EBITDA.
Combined Equity Value-Based Multiples - 🧠ANSWER ✔✔These will
change based on the purchase method because the Combined Equity
Value changes based on the amount of Stock used, and the Combined Net
Income changes based on the amount of Cash and Debt used and the
interest rates on them.
Walk me through a merger model - 🧠ANSWER ✔✔1.) project the financial
statements of the buyer/seller, 2.) estimate the purchase price and form of
payment, 3.) create a sources & uses schedule and purchase price
allocation schedule, 4.) combine the balance sheet of the buyer/seller, 5.)
combine the income statements of the buyer/seller, 6.) calculate cash flow,
debt repayment, and key metrics/ratios, 7.) calculate EPS accretion/dilution
and create sensitivity tables
What are the key projections you need to make for merger model financial
statements? - 🧠ANSWER ✔✔1.) Revenue, 2.) COGS/Opex, 3.) Net
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
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PRIVACY STATEMENT. ALL RIGHTS RESERVED
Questions and Corresponding Answers
with Surety of 100% Pass Mark
How can you think about calculating combined equity value? - 🧠ANSWER
✔✔if no Stock is used, Combined Equity Value = Company A's Equity
Value.
If it's a 100% Stock deal, Combined Equity Value = Company A's Equity
Value + Company B's Purchase Equity Value.
How can you think about calculating combined enterprise value? -
🧠ANSWER ✔✔Combined Enterprise Value = Acquirer's Current Enterprise
Value + Seller's Purchase Enterprise Value
Equal to the Combined Equity Value, plus the Debt (and other Debt-like
Liabilities), minus the Cash (and other non-core-business Assets) of the
Combined Company... including the Cash or Debt used to fund the deal.
Where will combined multiples roughly end up? - 🧠ANSWER ✔✔The
Combined Multiples will be in between the Acquirer's multiples and Target's
purchase multiples.
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
1
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, How does purchase method effect combined Enterprise Value-Based
Multiples? - 🧠ANSWER ✔✔These will not change regardless of the
purchase method because the Combined Enterprise Value isn't affected by
the purchase method, and neither are metrics like Revenue, EBIT, or
EBITDA.
Combined Equity Value-Based Multiples - 🧠ANSWER ✔✔These will
change based on the purchase method because the Combined Equity
Value changes based on the amount of Stock used, and the Combined Net
Income changes based on the amount of Cash and Debt used and the
interest rates on them.
Walk me through a merger model - 🧠ANSWER ✔✔1.) project the financial
statements of the buyer/seller, 2.) estimate the purchase price and form of
payment, 3.) create a sources & uses schedule and purchase price
allocation schedule, 4.) combine the balance sheet of the buyer/seller, 5.)
combine the income statements of the buyer/seller, 6.) calculate cash flow,
debt repayment, and key metrics/ratios, 7.) calculate EPS accretion/dilution
and create sensitivity tables
What are the key projections you need to make for merger model financial
statements? - 🧠ANSWER ✔✔1.) Revenue, 2.) COGS/Opex, 3.) Net
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
2
PRIVACY STATEMENT. ALL RIGHTS RESERVED
