FINANCIAL STATEMENT MODELING RETAKE ACTUAL EXAM FROM WALL STREET PREP||QUESTIONS AND CORRECT DETAILED ANSWERS|| GRADED A+||2025 UPDATE

FINANCIAL STATEMENT MODELING
RETAKE ACTUAL EXAM FROM WALL
STREET PREP||QUESTIONS AND
CORRECT DETAILED ANSWERS||
GRADED A+||2025 UPDATE




Which of the below accurately describes the revolver logic in our
model? - CORRECT-ANSWER-Nike needs cash - draw on revolver,

Nike does not need cash - pay down revolver if there is a balance,

Nike does not need cash - do nothing if there is no revolver balance




Why is the revolver interest rate lower than our long-term interest
rate? - CORRECT-ANSWER-It has higher seniority




What balance did we use for debt to calculate our annual interest
expense? - CORRECT-ANSWER-Average of beginning and ending
balance of debt

,What interest rate did we use for the interest income on our cash? -
CORRECT-ANSWER-0.50%




What is the main source of circularity in our model? - CORRECT-
ANSWER-The debt / interest schedule




What is the driver for the number of shares that we repurchase? -
CORRECT-ANSWER-Projected P/E multiple,

The $ amount of shares to be repurchased,

Projected share price




How did we calculate historical dilutive securities outstanding? -
CORRECT-ANSWER-Dilutive Shares Outstanding - Basic Shares
outstanding

, How did we calculate EPS in our model? - CORRECT-ANSWER-Net
income / diluted shares outstanding




What did we use as our projected P/E multiple? - CORRECT-ANSWER-
33x




Which formula below will give us share price? - CORRECT-ANSWER-
Price / Earnings * Earnings / Diluted Shares Outstanding

P/E * EPS




What strike price increase did we assume in our model for each
projection year? - CORRECT-ANSWER-$5




In module 8, what was the new cause of circularity in our model -
CORRECT-ANSWER-Shares Outstanding / Share Price / EPS