Modeling Questions With Correct And
Appropriate Answers
Which bof bthe bfollowing bstatements babout ba bP/E bmultiple bis bfalse? b-
bCORRECT✅✅It bis bnot baffected bby bnon-cash bexpenses
Why bare bacquisition bmultiples btypically bhigher bthan bcomparable bcompanies
banalysis? b- bCORRECT✅✅Acquisition bmultiples btypically bincorporate ba bpremium
Enterprise bvalue bis b- bCORRECT✅✅Similar bin btheory bto btransaction bvalue
What bis bthe bformula bfor bequity bvalue? b- bCORRECT✅✅Share bprice bx bshares
boutstanding
Which bof bthe bfollowing bpairs bbelongs btogether? b- bCORRECT✅✅Enterprise bvalue
band bEBITDA
Which bof bthe bfollowing bpairs bdo bnot bbelong btogether? b- bCORRECT✅✅Enterprise
bValue band bNet bEarnings
Which bof bthe bfollowing bdoes bnot bbelong bwith benterprise bvalue bin ba bmultiple? b-
bCORRECT✅✅Net bEarnings
What bis bthe bprimary bdifference bbetween btrading bcomparables band bacquisition
bcomparables? b- bCORRECT✅✅Trading bcomparables bchange bas bthe bshare bprice
bchanges bin bthe bstock bmarket, bwhereas bacquisition bcomparables bare bbased bon
bhistorical bM&A btransactions band bremain bstatic
Companies bA&B bboth bhave brevenue bof b$1,000 band bEV/Revenue bmultiples bof
b1.5x. bCompany bA bhas ban bEV/EBITDA bof b6.0x band bCompany bB bhas ban
bEV/EBITDA bof b8.0x. bWhat bis bCompany bA's bEBITDA? b- bCORRECT✅✅$250
Companies bA band bB bboth bhave brevenue bof b$1,000 band bEV/Revenue bmultiples bof
b1.5x. bCompany bA bhas ban bEV/EBITDA bof b6.0x band bCompany bB bhas ban bEBITDA
bmargin bof b15%. bWhat bis bCompany bB's bEBITDA bmultiple? b- bCORRECT✅✅10.0x
If ba bcompany bis bannounced bto bbe bsold bfor ba btransaction bvalue bof b$15 bmillion
band bit bhas b$2.5million bof bdebt band b$2.0million bof bcash, bwhat bis bthe bpurchase
bprice bof bthe bcompany? b- bCORRECT✅✅$14.5million
Appropriate Answers
Which bof bthe bfollowing bstatements babout ba bP/E bmultiple bis bfalse? b-
bCORRECT✅✅It bis bnot baffected bby bnon-cash bexpenses
Why bare bacquisition bmultiples btypically bhigher bthan bcomparable bcompanies
banalysis? b- bCORRECT✅✅Acquisition bmultiples btypically bincorporate ba bpremium
Enterprise bvalue bis b- bCORRECT✅✅Similar bin btheory bto btransaction bvalue
What bis bthe bformula bfor bequity bvalue? b- bCORRECT✅✅Share bprice bx bshares
boutstanding
Which bof bthe bfollowing bpairs bbelongs btogether? b- bCORRECT✅✅Enterprise bvalue
band bEBITDA
Which bof bthe bfollowing bpairs bdo bnot bbelong btogether? b- bCORRECT✅✅Enterprise
bValue band bNet bEarnings
Which bof bthe bfollowing bdoes bnot bbelong bwith benterprise bvalue bin ba bmultiple? b-
bCORRECT✅✅Net bEarnings
What bis bthe bprimary bdifference bbetween btrading bcomparables band bacquisition
bcomparables? b- bCORRECT✅✅Trading bcomparables bchange bas bthe bshare bprice
bchanges bin bthe bstock bmarket, bwhereas bacquisition bcomparables bare bbased bon
bhistorical bM&A btransactions band bremain bstatic
Companies bA&B bboth bhave brevenue bof b$1,000 band bEV/Revenue bmultiples bof
b1.5x. bCompany bA bhas ban bEV/EBITDA bof b6.0x band bCompany bB bhas ban
bEV/EBITDA bof b8.0x. bWhat bis bCompany bA's bEBITDA? b- bCORRECT✅✅$250
Companies bA band bB bboth bhave brevenue bof b$1,000 band bEV/Revenue bmultiples bof
b1.5x. bCompany bA bhas ban bEV/EBITDA bof b6.0x band bCompany bB bhas ban bEBITDA
bmargin bof b15%. bWhat bis bCompany bB's bEBITDA bmultiple? b- bCORRECT✅✅10.0x
If ba bcompany bis bannounced bto bbe bsold bfor ba btransaction bvalue bof b$15 bmillion
band bit bhas b$2.5million bof bdebt band b$2.0million bof bcash, bwhat bis bthe bpurchase
bprice bof bthe bcompany? b- bCORRECT✅✅$14.5million
