CFI FMVA 6 Latest Update 2024-2025 Actual
Exam with 200 Questions and 100% Verified
Correct Answers Guaranteed A+ Approved by
the Professor
10. - CORRECT ANSWER: Deductible Temporary differences
Generally arise when the tax base of the assets is greater than the carrying amount
Generally arise when there are differences that result in current accounting income
being greater than taxable income
Give rise to deferred tax assets
Taxable Temporary Diffferences
Arise when the tax base of the liabilities is greater than the carrying amount
Arise when the carrying amount of the liabilities is greater than the tax base
Taxable Temporary Differences
3 statement modeling - CORRECT ANSWER:
3. - CORRECT ANSWER: Conservatism principle:: It provides guidance on how to
record transactions when there is uncertainty.
Historical Cost:It states that assets and liabilities are recorded on the financial
statements at the cost at which they were acquired or assumed.
Objectivity; It states that financial statements must be free from bias and based on
verifiable evidence.
Economic Entity: It states that transactions carried out by a business are separated from
those conducted by its owner.
Matching:It states that the expenses of a business should be recorded in the periods in
which the corresponding revenues are earned.
,A discounted cash flow is typically comprised of two different stages or periods.Which of
the following are the two different stages of a typical DCF, in chronological order? -
CORRECT ANSWER: Discrete Forecast; Terminal Value
A liquidity analysis would commonly be found under which section of a pitchbook? -
CORRECT ANSWER: Company Overview
A precedent transactions overview would appear under which section of an investment
banking pitchbook? - CORRECT ANSWER: Valaution Overview
A real-estate holdings company has the following fixed asset detail:Buildings: $25.0
Million; Useful Life 20-years.Land: $5.0 Million.Assuming straight-line depreciation, what
would the company's total annual depreciation expense be? - CORRECT ANSWER:
$1.25 million.
A sound accounting framework allows for all of the following benefits except: -
CORRECT ANSWER: Identical items being reported on the financial statements of
different companies
Accounting Principles and Standards - CORRECT ANSWER:
Accounting principles require us to recognize taxes when they are incurred. However,
there is a difference in accounting between standard accounting principles and tax
accounting. It's critical for an analyst to understand the difference.Which of the following
is a correct statement?Select ALL that apply. - CORRECT ANSWER: Deferred taxes are
taxes that will be deferred to a later period due to tax rules.
Deferred taxes are non-cash taxes in the current period.
Current taxes are cash taxes to be paid in the near term.
Although there are two different ways of deriving terminal value, either method must be
discounted back to the valuation date.
Open the attached Excel file and go to the worksheet labeled: 2-PV of Terminal
, Using the perpetuity growth rate, calculate the present value of the terminal value. -
CORRECT ANSWER: $313,375
An unlevered DCF valuation will derive the implied enterprise value of a business, but
many times we want to know the equity value per share.Please select the appropriate
steps in calculating the equity value per share from an unlevered DCF. - CORRECT
ANSWER: Equity Value per Share = Enterprise Value minus Debt plus Cash, all divided
by diluted shares outstanding
Analysts use fully diluted shares outstanding when calculating equity value. Therefore,
it's important to understand how to account for potentially dilutive securities.
Open the attached Excel file and go to the worksheet labeled: 5-Treasury Stock
Using the treasury stock method, calculate the number of additional shares issued from
stock options. - CORRECT ANSWER: 0.9 million shares
Applying a multiple to valuing a company is the ultimate outcome of Comparable
Company Analysis.
Open the attached Excel file and go to the worksheet labeled: 3-Valuation 1
Calculate the target company's implied equity value per share. - CORRECT ANSWER:
$119.67
Applying a multiple to valuing a company is the ultimate outcome of Comparable
Company Analysis.
Open the attached Excel file and go to the worksheet labeled: 4-Valuation 2 14
Using the average of the peer group, calculate the implied enterprise value. -
CORRECT ANSWER: $7,783
As an alternative to CTRL + C and then CTRL + V to perform copy and paste, what
combination of keys (as outlined in the videos) will perform the same action? -
CORRECT ANSWER: CTRL + D
As an analyst, it's important to understand how invested cash flows compound into the
future, as well as calculate the present value of a future cash inflow.
The 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 Tutordiligent. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $20.49. You're not tied to anything after your purchase.
