Unlevered equity - Study guides, Class notes & Summaries

Trading Comps Modeling Wall Street Prep Exam Questions And Answers Why we use trading comps to value companies - ANS The purpose of a trading comps analysis is to determine what is the "appropriate" value of a company, based on the market values of operationally similar companies. When you try to gauge the fair value of your house by comparing to the values of houses nearby, you're doing a comps analysis. How are comps analyzed? - ANS We don't compare absolute values but rather ...

Adventis Financial Modeling Certification (FMC) Level 2 Exam (Latest 2023/ 2024 Update) Questions and Verified Answers| 100% Correct| Grade A Q: a security pays $100 in 3 years and you are required a minimum rate of return of 12% annually. What is the maximum amount you will purchase this security for today? Answer: $71.18 Q: You receive a loan for $1000. The loan accumulates interest at a rate of 6.5%. How much will interest will you owe in 4 years? Answer: $286.47 ...

of the Free Cash Flows, you determine the company's Terminal Value, using either the Multiples Method or the Gordon Growth Method, and then you discount that back to its Net Present Value using the Discount Rate. Finally, you add the two together to determine the company's Enterprise Value." Walk me through how you get from Revenue to Free Cash Flow in the projections. - answerFirst, confirm that they are asking for Unlevered Free Cash Flow (Free Cash Flow to Firm). If so: Subtract COG...

Discounted Cash Flow Exam Questions With 100% Correct Answers What's the basic concept behind a Discounted Cash Flow analysis? - answerThe concept is that you value a company based on the present value of its Free Cash Flows far into the future. You divide the future into a "near future" period of 5-10 years and then calculate, project, discount, and add up those Free Cash Flows; and then there's also a "far future" period for everything beyond that, which you can't estimate as prec...

Discounted Cash Flow Exam Questions With 100% Correct Answers What's the basic concept behind a Discounted Cash Flow analysis? - answerThe concept is that you value a company based on the present value of its Free Cash Flows far into the future. You divide the future into a "near future" period of 5-10 years and then calculate, project, discount, and add up those Free Cash Flows; and then there's also a "far future" period for everything beyond that, which you can't estimate as prec...

On the basis of this information, what is LeCompte's optimal capital structure, and what is the firm's cost of capital at this optimal capital structure? Group of answer choices Ws = 0.8; wd = 0.2; WACC = 10.78% Ws = 0.7: wa = 0.3; WACC = 9.11% Ws = 0.9; wa = 0.1; WACC = 11.73% Ws = 0.5; wd = 0.5; WACC = 11.37% Ws = 0.6; wd = 0.4; WACC = 9.50% o :## Ws = 0.8; wd = 0.2; WACC = 10.78% You work for the CEO of a new company that plans to manufacture and sell a new type of laptop comput...

DISCOUNTED CASH FLOW [DCF] EXAM REVIEW QUESTIONS AND ANSWERS, GRADED A+/ A company has a high Debt balance and is paying off a significant portion of its Debt principal each year. How does that impact a DCF? - -Trick question. You don't account for this at all in an Unlevered DCF because you ignore interest expense and debt principal repayments. In a Levered DCF, you factor it in by reducing the interest expense each year as the Debt goes down and also by reducing Free Cash Flow by th...

Why we use trading comps to value companies - Answer-The purpose of a trading comps analysis is to determine what is the "appropriate" value of a company, based on the market values of operationally similar companies. When you try to gauge the fair value of your house by comparing to the values of houses nearby, you're doing a comps analysis. How are comps analyzed? - Answer-We don't compare absolute values but rather multiples to account for differences in a company. Non-operati...

orking Capital. (This is unlevered FCF since we went off of EBIT rather than EBT). What is an alternate way to calculate FCF aside from taking NI, adding DEP and subtracting CAPEX? - answerTake CF from operations and subtract CAPEX to get levered CF. To get unlevered you need to add back the tax adjusted interest expense and subtract tax adjusted interest income. Why do you use 5 or 10 years for a DCF? - answerAnything beyond 10 years is too difficult to predict for most companies. What ...

CMSA (EQUITY MARKET FUNDAMENTALS) EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS VERIFIED GRADED A++ What are the different types of asset classes from least risky to most? 1. Cash & Cash Equivalents 2. Fixed Income (Preferred Stock, Private Debt) 3. Equities 4. Alternative Investments (Real Estate, Commodities) Define Beta Beta is the correlation of an asset's return profile relative to the markets returns; This shows systematic risk and can't be reduced through diversification...