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Exam (elaborations)

Corporate Finance - Company Valuation Exam Questions With Correct Answers.

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  • Course
  • Corporate Finance
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  • Corporate Finance

Corporate Finance - Company Valuation Exam Questions With Correct Answers. What does almost every valuation method include? - answerDiscounted future Cash Flows or Dividends What is an assumption to make regarding cashflows - answerAssumption that shareholders have already been rewarded from c...

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  • September 5, 2024
  • 3
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • Corporate Finance
  • Corporate Finance
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Corporate Finance - Company Valuation
Exam Questions With Correct Answers.


What does almost every valuation method include? - answer✔✔Discounted future Cash Flows or
Dividends

What is an assumption to make regarding cashflows - answer✔✔Assumption that shareholders
have already been rewarded from cashflows generated in the past

What should be excluded for future cashflows? - answer✔✔Historical cashflows should be
excluded for future cashflows

What is the formula for value? - answer✔✔Value = PV of cashflows within the planning horizon
+ PV of cashflows after the planning horizon

What is the planning horizon normally set at? - answer✔✔5 - 10 years

How are cashflows discounted? - answer✔✔At the Weighted Average Cost of Capital (WACC)

What are cashflows after the planning horizon treated as? - answer✔✔A perpetuity

What does Operational Cashflow Valuation rely on? - answer✔✔Accurate Forecasting
Valuation is based on financial forecasts therefore it requires a set of financial assumptions, what
are some of the assumptions? - answer✔✔-Profit growth
-Depreciation and other non- cash items
-Investments in fixed assets
-Changes to WC
-Interests payments
-Future tax payments

What would go in the first column of a cashflow valuation table? - answer✔✔Year


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