DCF Valuation Modeling Final Exam
Questions With Solved Solutions.
What are two benefits of making a compacted DCF model - Answer 1. Helps us learn the main features
of a DCF model
2. Helps in a situation where we need a quick analysis
What are two important dates in a DCF - Answer 1. Timing of the cashflows
2. Date of Valuation
The time value of money is also called the _______ - Answer The time quantity of money
What is the simplified formula to discount the cashflows - Answer Unlevered Free Cash Flow (UFCF)/
Weighted Average Cost of Capital (WACC)
What are the three types of valuation techniques? - Answer Discounted Cashflow Analysis
Comparable Trading Analysis
President Transaction analysis
Define Unlevered Free Cashflow - Answer Cash flow available to all capital providers
Define Weighted Average Cost of Capital - Answer The cost of capital from all capital providers
What is the Enterprise Value in a DCF using Free Cashflows - Answer Enterprise value = PV of
UFCF/WACC
How long into the future should we forecast in a DCF? - Answer In perpetuity (This is a common
interview question)
What are the two parts of a DCF? - Answer 1. Discrete Forecast
, 2. Terminal Value
What is a terminal value of a firm? - Answer
When is the start and end of the discrete forecast? - Answer It starts when the company is growing
faster than the overall economy and ends when the company grows at the same rate of the economy
When is the start and end of a Terminal Value forecast? - Answer The Terminal value forecast starts
when the company experiences the same amount of growth as the overall economy and then continues
forever (Using a growing perpetuity formula)
Perpetuity Growth formula - Answer PV1=CF2/(R-G)
PV=Present Value of cashflow
CF=Cashflow of the next year
R= Required Return
G=Growth Rate
What does Enterprise Value represent? - Answer Our view of the companies value
Equity Value formula - Answer Equity Value = Enterprise Value - Net Debt
What is Net Debt formula? - Answer Total Debt - Cash = Net Debt
What if the formula for Equity Value per Share? - Answer Equity Value/Shares Outstanding = Equity
Value per Share
What is the keyboard shortcut for Zooming in and out? - Answer Ctrl Alt +
or
Ctrl Alt -
Questions With Solved Solutions.
What are two benefits of making a compacted DCF model - Answer 1. Helps us learn the main features
of a DCF model
2. Helps in a situation where we need a quick analysis
What are two important dates in a DCF - Answer 1. Timing of the cashflows
2. Date of Valuation
The time value of money is also called the _______ - Answer The time quantity of money
What is the simplified formula to discount the cashflows - Answer Unlevered Free Cash Flow (UFCF)/
Weighted Average Cost of Capital (WACC)
What are the three types of valuation techniques? - Answer Discounted Cashflow Analysis
Comparable Trading Analysis
President Transaction analysis
Define Unlevered Free Cashflow - Answer Cash flow available to all capital providers
Define Weighted Average Cost of Capital - Answer The cost of capital from all capital providers
What is the Enterprise Value in a DCF using Free Cashflows - Answer Enterprise value = PV of
UFCF/WACC
How long into the future should we forecast in a DCF? - Answer In perpetuity (This is a common
interview question)
What are the two parts of a DCF? - Answer 1. Discrete Forecast
, 2. Terminal Value
What is a terminal value of a firm? - Answer
When is the start and end of the discrete forecast? - Answer It starts when the company is growing
faster than the overall economy and ends when the company grows at the same rate of the economy
When is the start and end of a Terminal Value forecast? - Answer The Terminal value forecast starts
when the company experiences the same amount of growth as the overall economy and then continues
forever (Using a growing perpetuity formula)
Perpetuity Growth formula - Answer PV1=CF2/(R-G)
PV=Present Value of cashflow
CF=Cashflow of the next year
R= Required Return
G=Growth Rate
What does Enterprise Value represent? - Answer Our view of the companies value
Equity Value formula - Answer Equity Value = Enterprise Value - Net Debt
What is Net Debt formula? - Answer Total Debt - Cash = Net Debt
What if the formula for Equity Value per Share? - Answer Equity Value/Shares Outstanding = Equity
Value per Share
What is the keyboard shortcut for Zooming in and out? - Answer Ctrl Alt +
or
Ctrl Alt -
