Exam (elaborations)
DCF Valuation Modeling Exam Questions and Answers 2024 with complete solution
- Course
- Institution
DCF Valuation Modeling Exam Questions and Answers 2024 with complete solution
[Show more]
Content preview
1 | P a g e DCF Valuation Modeling Exam Questions and Answers 2024 with complete solution What are two b enefits 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 Valuatio n 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) 2 | P a g e 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 3 | P a g e 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 exp eriences 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 DebtThe benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller keithdaniel. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $24.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
73091 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now