Unlevered beta Samenvattingen, Aantekeningen en Examens

Integrated Breaking into (DCF) Wall Street Questions And Answers Why do you add back non-cash charges? - CORRECT ANSWER --these include D&A and stock based compensation -add them back because you want to reflect how the company saves on taxes but does not actually pay cash for the line items How does the DCF replicate the CF statement but takes into account what changes? - CORRECT ANSWER -* CFO - takes everything *CFF - eliminates everything bc items are either related to debt (not a...

GB550 Unit 6 exam questions & answers 2022 update Question 1 (4 points) What is the difficulty involved in changing a partnership to a regular corporation business form? Question 1 options: a) Less profits will be federally taxed b) Transfer of ownership c) Raising additional investment d) Less investor liability exposure Question 2 (4 points) Compound interest does not help in the case of investments made when the interest rate just keeps up with inflation. Question 2 options: a) ...

Conceptual Questions Q1. Walter White recently quitted his high school chemistry teacher job and joined the Bank of BKB as a financial analyst. His first task is to capitalize R&D expenses and reflect the adjustments on the three major financial statements. After reviewing his work, one of the Bank of BKB’s clients asks White to explain the reason that R&D expense is not capitalized following the US GAAP guideline. White suggests that the reason is that the value of R&D activities cannot ...

Bonds a. What are the expected cash flows? b. What is the appropriate discount rate? - correct answer a. coupon + principal b. debt cost of capital Equity a. What are the expected cash flows? b. What is the appropriate discount rate? - correct answer a. Dividends and capital gains b. Equity cost of capital Entire Firm a. What are the expected cash flows? b. What is the appropriate discount rate? - correct answer a. FCF + TV b. WACC a. What do discount rates in ge...

Corporate Finance Financial break-even - Answer- Financial break even NPV solved=0, OCF* for NPV=0 Q=(FC+OCF*)/ (P-v) v=variable cost per unit General Break-Even - Answer- Q=(FC+OCF) /(P-v) Constant Growth Model (infinite) - Answer- a widely cited dividend valuation approach that assumes that dividends will grow at a constant rate, but a rate that is less than the required return Constant Growth Model (finite) - Answer- Should include terminal value (what you sell it for) @ end ...

Leverage Ratio - Answer- total debt/normalized EBITDA Interest Coverage - Answer- normalized operating income/interest expense Debt to Market Capital - Answer- total debt/(total debt+market cap) Unlevered Beta - Answer- Beta/(1+(1-tax rate)*(debt/market rate) Re-levering beta - Answer- unlevered beta*(1+(1-tax rate)*(debt/market cap) PV Factor - Answer- 1/(1+WACC)^half year convention Debt of post-acquisition company - Answer- last year debt+value of new company (after prem)*% ...

FI 360 FINAL EXAM, COMPLETE WITH QUESTIONS AND ANSWERS.Question 1 6.5 / 6.5 pts The feature in a bond indenture that requires systematic retirement of the bond issue is a planned call provision. sinking fund provision. forced conversion provision. mandated redemption provision. Question 2 6.5 / 6.5 pts Operating leverage describes the relationship between... EBIT and sales taxes and sales debt and equity fixed costs and variable costs Question 3 6.5 / 6.5 pts The risk-free rate i...

Present Value PV = CF/(1+r)^n where CF = cash flow in future period r = interest rate n = number of periods Net Present Value NPV = - I + CF/(1+r)^n + ... + where I = initial investment PV of Perpetuity PV = C/R where: R= interest rate C= cash flow PV of Growing Perpetuity PV = C/(R-G) where: G= growth PV of Annuity PV = (C/r) [ 1- (1/(1+R)^N)] where R = interest rate N = years PV of growing Annuity PV = (C/(R-G)) (1-((1+G)/(1+R))^N) ...

DCF – Basic questions with complete solution 20231. Walk me through a DCF. "A DCF values a company based on the Present Value of its Cash Flows and the Present Value of its Terminal Value. First, you project out a company's financials using assumptions for revenue growth, expenses and Working Capital; then you get down to Free Cash Flow for each year, which you then sum up and discount to a Net Present Value, based on your discount rate - usually the Weighted Average Cost of Capital. Once ...

CFA Level 1 Formulas Exams 245 Questions with Answers Price change based on convexity - CORRECT ANSWER -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration - CORRECT ANSWER Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration - CORRECT ANSWER [(v-)-(v+)]/[2V0(change in yield)] Future Value - CORRECT ANSWER PV(1+(I/Y)^N) PV - CORRECT ANSWER FV/(1+r)^n PV of perpetuity - CORRECT ANSWER PMT / discount rate Ap...