Chapter 4 - Introduction to business valuations.Final Test
2026\2027.
what are the most common valuation methods?
- discounted cash flow
- asset-based
- dividend discounting
- comparable valuations
what is the difference between equity value and enterprise value?
Enterprise value is a measure which is very widely used in valuation for acquisitions and
private equity, as it represents both the value of the underlying business enterprise being
acquired, and the total finance needed to acquire and/or refinance that business.
Equity value is more commonly used in equity markets valuation and investment analysis,
where the need is to establish a market capitalisation or price per share.
what is the use, advantages and disadvantages of enterprise value?
what are the differences between public and private companies with respect to the
availability and reliability of company information and the typical sources of such
information?
what are the various responsibilities of public and private companies to make
information available or respond to information requests?
Enterprise value
______ refers to the market value of ALL of the OPERATIONAL ASSETS of a business,
irrespective of how these are financed. It can be calculated as the present value (PV) of the
cash flows (these assets are capable of generating), BEFORE deduction of any returns to
debt providers or shareholders.
An alternative way of looking at enterprise value is as the total market value of both the debt
, Chapter 4 - Introduction to business valuations.Final Test
2026\2027.
(including any outstanding preference shares) and the equity of the company - which is
equivalent to the total market value of the company's operational assets.
Equity value
_____ of a business is the market value of the ordinary shares of the company. Lenders and
preference shareholders have a prior claim on the assets and profits of a company, ahead
of ordinary shareholders. The equity value of the business is the residual of the enterprise
value after the deduction of these prior claims.
are listed or quoted companies required to make announcements through a regulated
information system of any material changes to their position?
both are required to make announcements of any material changes under the Market Abuse
Regulation, Disclosure Guidance and Transparency Rules, Listing Rules, AIM Rules and/or the
NEX Exchange Growth Market Rules.
In addition, the requirements of the UK Corporate Governance Code and the QCA Corporate
Governance Code on a comply or explain basis (the former compulsory for premium listed
companies, while AIM quoted companies can choose between the two) have led to a greater
level of disclosure.
5 years
listed and quoted companies are required to maintain investor relations websites that
contain all announcements and documents published during the last ____ years
market value
market capitalisation of a company
represents the value of the company's equity capital
also referred to as market cap
transaction value
common term used in M&A.
2026\2027.
what are the most common valuation methods?
- discounted cash flow
- asset-based
- dividend discounting
- comparable valuations
what is the difference between equity value and enterprise value?
Enterprise value is a measure which is very widely used in valuation for acquisitions and
private equity, as it represents both the value of the underlying business enterprise being
acquired, and the total finance needed to acquire and/or refinance that business.
Equity value is more commonly used in equity markets valuation and investment analysis,
where the need is to establish a market capitalisation or price per share.
what is the use, advantages and disadvantages of enterprise value?
what are the differences between public and private companies with respect to the
availability and reliability of company information and the typical sources of such
information?
what are the various responsibilities of public and private companies to make
information available or respond to information requests?
Enterprise value
______ refers to the market value of ALL of the OPERATIONAL ASSETS of a business,
irrespective of how these are financed. It can be calculated as the present value (PV) of the
cash flows (these assets are capable of generating), BEFORE deduction of any returns to
debt providers or shareholders.
An alternative way of looking at enterprise value is as the total market value of both the debt
, Chapter 4 - Introduction to business valuations.Final Test
2026\2027.
(including any outstanding preference shares) and the equity of the company - which is
equivalent to the total market value of the company's operational assets.
Equity value
_____ of a business is the market value of the ordinary shares of the company. Lenders and
preference shareholders have a prior claim on the assets and profits of a company, ahead
of ordinary shareholders. The equity value of the business is the residual of the enterprise
value after the deduction of these prior claims.
are listed or quoted companies required to make announcements through a regulated
information system of any material changes to their position?
both are required to make announcements of any material changes under the Market Abuse
Regulation, Disclosure Guidance and Transparency Rules, Listing Rules, AIM Rules and/or the
NEX Exchange Growth Market Rules.
In addition, the requirements of the UK Corporate Governance Code and the QCA Corporate
Governance Code on a comply or explain basis (the former compulsory for premium listed
companies, while AIM quoted companies can choose between the two) have led to a greater
level of disclosure.
5 years
listed and quoted companies are required to maintain investor relations websites that
contain all announcements and documents published during the last ____ years
market value
market capitalisation of a company
represents the value of the company's equity capital
also referred to as market cap
transaction value
common term used in M&A.
