Modeling questions
1. Which of the following statements about a P/E multiple is false?: It is
not affected by non-cash expenses
2. Why are acquisition multiples typically higher than comparable
companies analysis?: Acquisition multiples typically incorporate a
premium
3. Enterprise value is: Similar in theory to transaction value
4. What is the formula for equity value?: Share price x shares outstanding
5. Which of the following pairs belongs together?: Enterprise value and
EBITDA
6. Which of the following pairs do not belong together?: Enterprise Value
and Net Earnings
7. Which of the following does not belong with enterprise value in a
multiple?-
1/3
, : Net Earnings
8. What is the primary difference between trading comparables and
acquisi- tion comparables?: Trading comparables change as the share
price changes in the stock market, whereas acquisition comparables
are based on historical M&A transactions and remain static
9. Companies A&B both have revenue of $1,000 and EV/Revenue multiples
of 1.5x. Company A has an EV/EBITDA of 6.0x and Company B has an
EV/EBITDA of 8.0x. What is Company A's EBITDA?: $250
10.Companies A and B both have revenue of $1,000 and EV/Revenue
multiples of 1.5x. Company A has an EV/EBITDA of 6.0x and Company B has
an EBITDA margin of 15%. What is Company B's EBITDA multiple?: 10.0x
11.If a company is announced to be sold for a transaction value of $15
million and it has $2.5million of debt and $2.0million of cash, what is the
purchase price of the company?: $14.5million
12.Which of the below line items is not included in calculating unlevered
2/3
1. Which of the following statements about a P/E multiple is false?: It is
not affected by non-cash expenses
2. Why are acquisition multiples typically higher than comparable
companies analysis?: Acquisition multiples typically incorporate a
premium
3. Enterprise value is: Similar in theory to transaction value
4. What is the formula for equity value?: Share price x shares outstanding
5. Which of the following pairs belongs together?: Enterprise value and
EBITDA
6. Which of the following pairs do not belong together?: Enterprise Value
and Net Earnings
7. Which of the following does not belong with enterprise value in a
multiple?-
1/3
, : Net Earnings
8. What is the primary difference between trading comparables and
acquisi- tion comparables?: Trading comparables change as the share
price changes in the stock market, whereas acquisition comparables
are based on historical M&A transactions and remain static
9. Companies A&B both have revenue of $1,000 and EV/Revenue multiples
of 1.5x. Company A has an EV/EBITDA of 6.0x and Company B has an
EV/EBITDA of 8.0x. What is Company A's EBITDA?: $250
10.Companies A and B both have revenue of $1,000 and EV/Revenue
multiples of 1.5x. Company A has an EV/EBITDA of 6.0x and Company B has
an EBITDA margin of 15%. What is Company B's EBITDA multiple?: 10.0x
11.If a company is announced to be sold for a transaction value of $15
million and it has $2.5million of debt and $2.0million of cash, what is the
purchase price of the company?: $14.5million
12.Which of the below line items is not included in calculating unlevered
2/3
