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practice exam 2026
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SECTION A – CONCEPTS & THEORY
1.
What is the primary purpose of a Trading Comps analysis?
A. Determine intrinsic value via discounted cash flows
B. Compare a company’s valuation multiples to peers
C. Forecast future cash flows
D. Value illiquid private assets
Answer: B
Rationale: Trading comps (relative valuation) benchmark valuation multiples of a company
against similar publicly traded peers.
2.
Which multiple is most commonly used in Trading Comps for profitability?
A. EV/EBITDA
B. P/E
C. EV/Revenue
D. Price/Book
Answer: A
Rationale: EV/EBITDA captures enterprise value relative to operating profitability before
non-cash items and capital structure.
3.
Why do we use Enterprise Value (EV) rather than Market Cap for most Trading Comps
multiples?
A. To include debt and cash effects
B. Because EV is always larger
C. Market Cap is only for private companies
D. To undervalue companies
Answer: A
Rationale: EV represents the total value of operations, inclusive of equity and debt, and less
cash.
practice exam 2026
practice exam 2026
, 2|Page
SECTION A – CONCEPTS & THEORY
1.
What is the primary purpose of a Trading Comps analysis?
A. Determine intrinsic value via discounted cash flows
B. Compare a company’s valuation multiples to peers
C. Forecast future cash flows
D. Value illiquid private assets
Answer: B
Rationale: Trading comps (relative valuation) benchmark valuation multiples of a company
against similar publicly traded peers.
2.
Which multiple is most commonly used in Trading Comps for profitability?
A. EV/EBITDA
B. P/E
C. EV/Revenue
D. Price/Book
Answer: A
Rationale: EV/EBITDA captures enterprise value relative to operating profitability before
non-cash items and capital structure.
3.
Why do we use Enterprise Value (EV) rather than Market Cap for most Trading Comps
multiples?
A. To include debt and cash effects
B. Because EV is always larger
C. Market Cap is only for private companies
D. To undervalue companies
Answer: A
Rationale: EV represents the total value of operations, inclusive of equity and debt, and less
cash.
practice exam 2026
