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TRANSACTION COMPS MODELLING WALL
STREET ACTUAL PREP EXAM 2026 | ALL
QUESTIONS AND VERIFIED ANSWERS |
RATED A + |NEW AND REVISED
1. The primary purpose of transaction comparable analysis in
valuation is to:
A. Determine a company’s replacement cost
B. Identify the intrinsic value based on discounted cash flows
C. Estimate valuation based on pricing of similar past deals
D. Forecast future earnings using trend analysis
It compares prices paid in similar historical transactions to
derive market valuations.
2. When selecting precedent transactions for comps analysis, the
most critical criterion is:
A. Geographic location
B. Auditor of the target company
C. Industry and business model similarity
D. Office location of acquirer
Industry and business model ensure comparability of economics
and multiples.
3. A typical valuation multiple used in transaction comps is:
A. Price to Book Value
B. EV/EBITDA
C. Dividend Yield
D. PEG Ratio
Enterprise Value to EBITDA is standard for transactions to
capture operating value irrespective of capital structure.
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4. Adjusted EBITDA in transaction comps should reflect:
A. Only GAAP accounting results
B. Normalized earnings excluding one-time charges
C. Future projected growth
D. Only revenues
Normalization ensures comparability across companies.
5. Which of the following is not typically adjusted in transaction
comps?
A. Past dividend payments
B. Non-recurring legal expenses
C. Restructuring charges
D. One-time gain on asset sale
Dividends affect equity returns but not the core operating
earnings used in comps.
6. A control premium reflects:
A. A discount for minority shareholders
B. Additional value a buyer pays for control rights
C. Value of preferred stock liquidation
D. A market discount rate
Buyers often pay above market price to obtain controlling
interest.
7. In transaction comps analysis, enterprise value excludes:
A. Equity value
B. Minority interests
C. Dividends payable
D. Total debt
Enterprise Value focuses on operating assets — dividends are
post-earnings distributions.
8. When calculating equity value from transaction data, you must:
A. Add cash and subtract debt
B. Add debt and subtract cash
C. Subtract debt and add cash
D. Ignore net working capital
Equity value = enterprise value – net debt.
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9. A high EV/Revenue multiple usually suggests:
A. High asset intensity
B. Low growth expectations
C. Market expects high growth or strong margins
D. High debt levels
Revenue multiple premium often reflects growth or strategic
value.
10. Which financial statement is least relevant in building
transaction comps?
A. Income Statement
B. Statement of Stockholders’ Equity
C. Balance Sheet
D. Cash Flow Statement
Equity movements are not directly used in calculating
transaction multiples.
11. A precedent transaction with unusual synergies should be:
A. Included without adjustment
B. Excluded entirely
C. Adjusted or excluded to avoid skewing multiples
D. Weighted more heavily
Synergies can inflate deal price beyond standalone value.
12. Enterprise Value is best described as:
A. Market cap only
B. Total assets minus liabilities
C. Value attributable to all capital providers
D. Net income times P/E
It represents the value of operations to debt and equity holders.
13. The EV/EBITDA multiple is advantageous because it is:
A. Affected by capital structure
B. Capital structure neutral
C. Biased toward large companies
D. Only useful for banks
EBITDA excludes interest and taxes, making comparisons across
capital structures fairer.
TRANSACTION COMPS MODELLING WALL
STREET ACTUAL PREP EXAM 2026 | ALL
QUESTIONS AND VERIFIED ANSWERS |
RATED A + |NEW AND REVISED
1. The primary purpose of transaction comparable analysis in
valuation is to:
A. Determine a company’s replacement cost
B. Identify the intrinsic value based on discounted cash flows
C. Estimate valuation based on pricing of similar past deals
D. Forecast future earnings using trend analysis
It compares prices paid in similar historical transactions to
derive market valuations.
2. When selecting precedent transactions for comps analysis, the
most critical criterion is:
A. Geographic location
B. Auditor of the target company
C. Industry and business model similarity
D. Office location of acquirer
Industry and business model ensure comparability of economics
and multiples.
3. A typical valuation multiple used in transaction comps is:
A. Price to Book Value
B. EV/EBITDA
C. Dividend Yield
D. PEG Ratio
Enterprise Value to EBITDA is standard for transactions to
capture operating value irrespective of capital structure.
,2|Page
4. Adjusted EBITDA in transaction comps should reflect:
A. Only GAAP accounting results
B. Normalized earnings excluding one-time charges
C. Future projected growth
D. Only revenues
Normalization ensures comparability across companies.
5. Which of the following is not typically adjusted in transaction
comps?
A. Past dividend payments
B. Non-recurring legal expenses
C. Restructuring charges
D. One-time gain on asset sale
Dividends affect equity returns but not the core operating
earnings used in comps.
6. A control premium reflects:
A. A discount for minority shareholders
B. Additional value a buyer pays for control rights
C. Value of preferred stock liquidation
D. A market discount rate
Buyers often pay above market price to obtain controlling
interest.
7. In transaction comps analysis, enterprise value excludes:
A. Equity value
B. Minority interests
C. Dividends payable
D. Total debt
Enterprise Value focuses on operating assets — dividends are
post-earnings distributions.
8. When calculating equity value from transaction data, you must:
A. Add cash and subtract debt
B. Add debt and subtract cash
C. Subtract debt and add cash
D. Ignore net working capital
Equity value = enterprise value – net debt.
, 3|Page
9. A high EV/Revenue multiple usually suggests:
A. High asset intensity
B. Low growth expectations
C. Market expects high growth or strong margins
D. High debt levels
Revenue multiple premium often reflects growth or strategic
value.
10. Which financial statement is least relevant in building
transaction comps?
A. Income Statement
B. Statement of Stockholders’ Equity
C. Balance Sheet
D. Cash Flow Statement
Equity movements are not directly used in calculating
transaction multiples.
11. A precedent transaction with unusual synergies should be:
A. Included without adjustment
B. Excluded entirely
C. Adjusted or excluded to avoid skewing multiples
D. Weighted more heavily
Synergies can inflate deal price beyond standalone value.
12. Enterprise Value is best described as:
A. Market cap only
B. Total assets minus liabilities
C. Value attributable to all capital providers
D. Net income times P/E
It represents the value of operations to debt and equity holders.
13. The EV/EBITDA multiple is advantageous because it is:
A. Affected by capital structure
B. Capital structure neutral
C. Biased toward large companies
D. Only useful for banks
EBITDA excludes interest and taxes, making comparisons across
capital structures fairer.
