Modeling questions & Answers 100%
Correct!!
Which of the following statements about a P/E multiple is false? - ANSWERIt is not affected by non-
cash expenses
Why are acquisition multiples typically higher than comparable companies analysis? -
ANSWERAcquisition multiples typically incorporate a premium
Enterprise value is - ANSWERSimilar in theory to transaction value
What is the formula for equity value? - ANSWERShare price x shares outstanding
Which of the following pairs belongs together? - ANSWEREnterprise value and EBITDA
Which of the following pairs do not belong together? - ANSWEREnterprise Value and Net Earnings
Which of the following does not belong with enterprise value in a multiple? - ANSWERNet Earnings
What is the primary difference between trading comparables and acquisition comparables? -
ANSWERTrading comparables change as the share price changes in the stock market, whereas
acquisition comparables are based on historical M&A transactions and remain static
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? -
ANSWER$250
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? - ANSWER10.0x
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? - ANSWER$14.5million
Which of the below line items is not included in calculating unlevered free cash flow in a DCF? -
ANSWERInterest
What is the calculation for present value? - ANSWERFuture value / (1+ discount rate)^term
A security pays $100 in 3 years and you require a minimum rate of return of 12% annually. What is
the maximum amount you will purchase this security for today? - ANSWER$71.18
You receive a loan for $20,000. The loan accumulates interest at a rate of 4.5%. How much interest
will you owe in 4 years? - ANSWER$3,850.37
If you have unlevered free cash flow of $10 in year 5, a perpetuity growth rate of 2.5% and a discount
rate of 12.0%, what is the terminal value in todays dollars? - ANSWER$61.22
Correct!!
Which of the following statements about a P/E multiple is false? - ANSWERIt is not affected by non-
cash expenses
Why are acquisition multiples typically higher than comparable companies analysis? -
ANSWERAcquisition multiples typically incorporate a premium
Enterprise value is - ANSWERSimilar in theory to transaction value
What is the formula for equity value? - ANSWERShare price x shares outstanding
Which of the following pairs belongs together? - ANSWEREnterprise value and EBITDA
Which of the following pairs do not belong together? - ANSWEREnterprise Value and Net Earnings
Which of the following does not belong with enterprise value in a multiple? - ANSWERNet Earnings
What is the primary difference between trading comparables and acquisition comparables? -
ANSWERTrading comparables change as the share price changes in the stock market, whereas
acquisition comparables are based on historical M&A transactions and remain static
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? -
ANSWER$250
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? - ANSWER10.0x
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? - ANSWER$14.5million
Which of the below line items is not included in calculating unlevered free cash flow in a DCF? -
ANSWERInterest
What is the calculation for present value? - ANSWERFuture value / (1+ discount rate)^term
A security pays $100 in 3 years and you require a minimum rate of return of 12% annually. What is
the maximum amount you will purchase this security for today? - ANSWER$71.18
You receive a loan for $20,000. The loan accumulates interest at a rate of 4.5%. How much interest
will you owe in 4 years? - ANSWER$3,850.37
If you have unlevered free cash flow of $10 in year 5, a perpetuity growth rate of 2.5% and a discount
rate of 12.0%, what is the terminal value in todays dollars? - ANSWER$61.22
