ADVENTIS FMC LEVEL 2 EXAM 2026 QUESTIONS AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
what is value - (ANSWER)what people are willing to pay for (what the buyer pays)
who said, "Value is what people are willing to pay for" - (ANSWER)John Naisbitt
2 primary types of valuation - (ANSWER)1. relative valuation
2. intrinsic valuation
relative valuation refers to what - (ANSWER)methods that compare the price of a company to the
market value of similar assets
intrinsic value refers to what - (ANSWER)the value of a company through fundamental analysis without
reference to its market value but instead around its ability to generate cash flow
in an M&A context, what is EV - (ANSWER)transaction value
in an M&A context, what is equity value - (ANSWER)purchase price
a company sold for $100M and the company being bought had $15M of debt and $2M of cash, what
happens and what is the transaction value and purchase price - (ANSWER)- the $2M would be used by
shareholders of the acquired company to pay down existing $15M in debt to make $13M in debt now
(15 - 2 = 13)
- the proceeds from the deal would then be used to pay down the remaining debt (EV = CS + PS + Debt -
Cash)
- Result is 100 - 13 = 87
- TV = $100M
- Purchase price = $87 (check to shareholders of acquired company)
2 primary types of relative valuation - (ANSWER)1. comparable company analysis
2. acquisition comparables analysis
, ADVENTIS FMC LEVEL 2 EXAM 2026 QUESTIONS AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
comparable companies analyses (public trading comparables analyses) - (ANSWER)- most common types
of relative valuation
- these methods allow investors to compare valuation of similar companies by comparing similar ratios
most common public trading comparable ratios - (ANSWER)1. EV/EBITDA
2. EV/Revenue
3. Net income/Earnings (share price/earnings per share)
assume a company has $5M of EBITDA and two public companies most similar to the company trade at
6.0x and 7.0x EBITDA, what might you conclude - (ANSWER)- Ex: 7.0 = x/5 ; 6.0 = x/5
- can conclude that EV for the company should be between 30-35 million
what happens when a company trades at a multiple that is a premium or a discount to the industry
average - (ANSWER)investors will dig in to understand the rationale
assume that a company trades at 7.0x EBITDA but the average of comparable companies is 9.0x, what
can we conclude - (ANSWER)the company is being undervalued and the investor will look to buy shares
because he realizes that the share price will increase Wall St. begins to value the company in-line with its
peers
acquisition comparables analysis (transaction comparables analysis) - (ANSWER)represent comparable
acquisitions that have taken place and have been publicly announced
are multiples for acquisition comparables higher or lower than mulitples for comparable companies -
(ANSWER)higher because acquirers need to pay a premium to the current share price to gain control of
the company
most common type of intrinsic valuation - (ANSWER)DCF analysis
EXPERT SOLUTIONS
what is value - (ANSWER)what people are willing to pay for (what the buyer pays)
who said, "Value is what people are willing to pay for" - (ANSWER)John Naisbitt
2 primary types of valuation - (ANSWER)1. relative valuation
2. intrinsic valuation
relative valuation refers to what - (ANSWER)methods that compare the price of a company to the
market value of similar assets
intrinsic value refers to what - (ANSWER)the value of a company through fundamental analysis without
reference to its market value but instead around its ability to generate cash flow
in an M&A context, what is EV - (ANSWER)transaction value
in an M&A context, what is equity value - (ANSWER)purchase price
a company sold for $100M and the company being bought had $15M of debt and $2M of cash, what
happens and what is the transaction value and purchase price - (ANSWER)- the $2M would be used by
shareholders of the acquired company to pay down existing $15M in debt to make $13M in debt now
(15 - 2 = 13)
- the proceeds from the deal would then be used to pay down the remaining debt (EV = CS + PS + Debt -
Cash)
- Result is 100 - 13 = 87
- TV = $100M
- Purchase price = $87 (check to shareholders of acquired company)
2 primary types of relative valuation - (ANSWER)1. comparable company analysis
2. acquisition comparables analysis
, ADVENTIS FMC LEVEL 2 EXAM 2026 QUESTIONS AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
comparable companies analyses (public trading comparables analyses) - (ANSWER)- most common types
of relative valuation
- these methods allow investors to compare valuation of similar companies by comparing similar ratios
most common public trading comparable ratios - (ANSWER)1. EV/EBITDA
2. EV/Revenue
3. Net income/Earnings (share price/earnings per share)
assume a company has $5M of EBITDA and two public companies most similar to the company trade at
6.0x and 7.0x EBITDA, what might you conclude - (ANSWER)- Ex: 7.0 = x/5 ; 6.0 = x/5
- can conclude that EV for the company should be between 30-35 million
what happens when a company trades at a multiple that is a premium or a discount to the industry
average - (ANSWER)investors will dig in to understand the rationale
assume that a company trades at 7.0x EBITDA but the average of comparable companies is 9.0x, what
can we conclude - (ANSWER)the company is being undervalued and the investor will look to buy shares
because he realizes that the share price will increase Wall St. begins to value the company in-line with its
peers
acquisition comparables analysis (transaction comparables analysis) - (ANSWER)represent comparable
acquisitions that have taken place and have been publicly announced
are multiples for acquisition comparables higher or lower than mulitples for comparable companies -
(ANSWER)higher because acquirers need to pay a premium to the current share price to gain control of
the company
most common type of intrinsic valuation - (ANSWER)DCF analysis
