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TRANSACTION COMPS MODELLING
WALL STREET PRACTICE EXAM 2026
|QUESTIONS AND CORRECT DETAILED
ANSWERS |ALREADY A GRADED |NEW
AND REVISED
On january 1, 2014, shares of company x trade at $6.50 per share, with
400 million shares outstanding. The company has net debt of $300
million. After building an earnings model for company x, you have
projected free cash flow for each year through 2020 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free cash flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (wacc) for
company x is 10% and assume that free cash flows grow in perpetuity at
3.0% annually beyond 2020, the final projected year. Estimate the
present value of the projected free cash flows through 2020, discounted
at the stated wacc. Assume all cash flows are generated at the end of the
year (i.e., no mid-year adjustment): - answer- 837 million
On january 1, 2014, shares of company x trade at $6.50 per share, with
400 million shares outstanding. The
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Company has net debt of $300 million. After building an earnings model
for company x, you have projected free
Cash flow for each year through 2014 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free cash flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (wacc) for
company x is 10% and assume that free cash
Flows grow in perpetuity at 3.0% annually beyond 2020, the final
projected year.
Calculate company x's implied enterprise value by using the discounted
cash flow method: - answer- 2951.2 million
On january 1, 2014, shares of company x trade at $6.50 per share, with
400 million shares outstanding. The
Company has net debt of $300 million. After building an earnings model
for company x, you have projected free
Cash flow for each year through 2014 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free cash flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (wacc) for
company x is 10% and assume that free cash
TRANSACTION COMPS MODELLING
WALL STREET PRACTICE EXAM 2026
|QUESTIONS AND CORRECT DETAILED
ANSWERS |ALREADY A GRADED |NEW
AND REVISED
On january 1, 2014, shares of company x trade at $6.50 per share, with
400 million shares outstanding. The company has net debt of $300
million. After building an earnings model for company x, you have
projected free cash flow for each year through 2020 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free cash flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (wacc) for
company x is 10% and assume that free cash flows grow in perpetuity at
3.0% annually beyond 2020, the final projected year. Estimate the
present value of the projected free cash flows through 2020, discounted
at the stated wacc. Assume all cash flows are generated at the end of the
year (i.e., no mid-year adjustment): - answer- 837 million
On january 1, 2014, shares of company x trade at $6.50 per share, with
400 million shares outstanding. The
, 2|Page
Company has net debt of $300 million. After building an earnings model
for company x, you have projected free
Cash flow for each year through 2014 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free cash flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (wacc) for
company x is 10% and assume that free cash
Flows grow in perpetuity at 3.0% annually beyond 2020, the final
projected year.
Calculate company x's implied enterprise value by using the discounted
cash flow method: - answer- 2951.2 million
On january 1, 2014, shares of company x trade at $6.50 per share, with
400 million shares outstanding. The
Company has net debt of $300 million. After building an earnings model
for company x, you have projected free
Cash flow for each year through 2014 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free cash flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (wacc) for
company x is 10% and assume that free cash
