CFIN 6 PRACTICE EXAM LATEST 2024 QUESTIONS AND ANSWERS WITH RATIONALES (VERIFIED ANSWERS) ALREADY GRADED A+
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CFIN 6 PRACTICE
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CFIN 6 PRACTICE
CFIN 6 PRACTICE EXAM LATEST 2024 QUESTIONS AND ANSWERS WITH RATIONALES (VERIFIED ANSWERS) ALREADY GRADED A+
It is impossible for the acquisition price of a target firm to ever fall below book value - Answer-false
the following could be reasonable estimates of a firm's future terminal value: a....
CFIN 6 PRACTICE EXAM LATEST
2024 QUESTIONS AND ANSWERS
WITH RATIONALES (VERIFIED
ANSWERS) ALREADY GRADED A+
It is impossible for the acquisition price of a target firm to ever fall below book value -
Answer-false
the following could be reasonable estimates of a firm's future terminal value: a. book
value, b. liquidation or salvage value, c. a cash flow in perpetuity based on the flow in
the final year of the evaluation horizon - Answer-all of the above
when a cash flow in perpetuity is calculated, a. the appropriate cost of equity should be
used if the cash flow forecast has included interest on debt obligations, b. the
appropriate weighted-average cost of capital should be used if the cash-flow forecast
has not included interest on debt obligations, c. the cash-flow's growth is assumed to
have stabilized. - Answer-a b and c
The utility of sensitivity analysis is not nearly as great in merger valuations as it is in
capital budgeting (T/F) - Answer-false
Which of the following is the most likely reason that a merger will not be as financially
rewarding as initially projected? a. the cost of capital of the acquiring firm will change, b.
the cost of capital of the target company will change c. the tax code will change, d. the
projected cash flow enhancements will not materialize - Answer-projected cash flow
enhancements will not materialize
The appropriate discount rate to use in discounting the cash flow of the target is -
Answer-the target's cost of equity
The book value of the firm is a similar concept to the net worth of the individual. -
Answer-true
The target firm determines its liquidation value and the present value of its relevant
stand alone cash flows and selects the higher value. This is the target's - Answer-
minimum acceptable price
Company A has unused debt capacity. Company B acquires Company A to enhance -
Answer-financing capability
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