Ch1 - Questions - Answers PDF
Document Details
Uploaded by ImpressiveLearning
Université Paris Dauphine-PSL
Tags
Summary
This document contains questions and answers related to financial modeling, business valuation, and DCF analysis. The questions cover topics such as creating assumptions for free cash flow projections, determining the projection period, and key variables in a DCF analysis. The questions are focused on the application of discounted cash flow (DCF) analysis.
Full Transcript
Q1. Which of the following are relevant for creating assumptions when projecting FCF in a DCF? I. Historical interest expense II. Historical growth rates III. Classes of debt securities IV. Historical EBIT margins A. I and II B. I and III C. II and IV D. I, II, III, and IV Q2. Which of the following...
Q1. Which of the following are relevant for creating assumptions when projecting FCF in a DCF? I. Historical interest expense II. Historical growth rates III. Classes of debt securities IV. Historical EBIT margins A. I and II B. I and III C. II and IV D. I, II, III, and IV Q2. Which of the following factors help determine the length of the projection period? I. Sector II. Predictability of FCF III. Business model IV. Maturity of business A. I and II B. II and III C. II and IV D. I, II, III, and IV Q3. Which of the following are key variables commonly sensitized in the DCF? I. WACC II. Exit multiple III. IRR IV. EBIT margins A. I and III B. II and III C. I, II, and IV D. I, III, and IV Q4. What method is used to calculate cost of equity? A. WACC B. CAPM C. NWC D. APV Q5. Which of the following is the most appropriate market risk premium to use in the calculation of cost of equity? A. 0%-1% B. 2%-3% C. 6%-7% D. 10%+
