WALL STREET PREP TRANSACTION COMPS
MODELING EXAM
(PREMIUM WSP EXAM) QUESTIONS &
VERIFIED ANSWERS 2026/2027 LATEST
A company has the following information:
• 2014 share repurchase plan of $4 billion
• Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in
your financial model? - ✔✔✔ANSWER-60.6 million non-controlling
interest - ✔✔✔ANSWER-is an expense on the income statement and
equity o the balance sheet
A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
• Capex of $200 million in 2014
,• Preferred dividends of $100 million in 2014
• Common dividends of $400 million in 2014
What is the retained earnings balance at the end of 2014? -
✔ ✔✔ANSWER-15 billion
in order to find out how much cash is available to pay down short term
debt, such as revolving credit line, you must take -
✔✔✔ANSWER-beginning cash balance + pre-debt cash flows - min.
cash balance - required principal payments of LT and other debt
to calculate interest expense in the future, you should do which of the
following -✔✔✔ANSWER-apply a weighted average interest rate times
the average debt balance over the course of the year
enterprise (transaction) value represents the: - ✔✔✔ANSWER-value of all
capital invested in a business
A debt holder would be primarily concerned with whichof the following
multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
, III. Enterprise (Transaction) Value / Sales -✔✔✔ANSWER-1 and 3 only
On January 1, 2014, shares of Company X trade at $6.50 per share, with
400 million shares outstanding. The company has net debt of $300
million. After building an earnings model for Company X, you have
projected free cash flow for each year through 2020 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free Cash Flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (WACC) for
Company X is 10% and assume that free cash flows grow in perpetuity
at 3.0% annually beyond 2020, the final projected year. Estimate the
present value of the projected free cash flows through 2 020,
discounted at the stated WACC. Assume all cash flows are generated at
the end of the year (i.e., no mid-year adjustment): - ✔ ✔✔ANSWER-
837 million
On January 1, 2014, shares of Company X trade at $6.50 per share, with
400 million shares outstanding. The
MODELING EXAM
(PREMIUM WSP EXAM) QUESTIONS &
VERIFIED ANSWERS 2026/2027 LATEST
A company has the following information:
• 2014 share repurchase plan of $4 billion
• Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in
your financial model? - ✔✔✔ANSWER-60.6 million non-controlling
interest - ✔✔✔ANSWER-is an expense on the income statement and
equity o the balance sheet
A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
• Capex of $200 million in 2014
,• Preferred dividends of $100 million in 2014
• Common dividends of $400 million in 2014
What is the retained earnings balance at the end of 2014? -
✔ ✔✔ANSWER-15 billion
in order to find out how much cash is available to pay down short term
debt, such as revolving credit line, you must take -
✔✔✔ANSWER-beginning cash balance + pre-debt cash flows - min.
cash balance - required principal payments of LT and other debt
to calculate interest expense in the future, you should do which of the
following -✔✔✔ANSWER-apply a weighted average interest rate times
the average debt balance over the course of the year
enterprise (transaction) value represents the: - ✔✔✔ANSWER-value of all
capital invested in a business
A debt holder would be primarily concerned with whichof the following
multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
, III. Enterprise (Transaction) Value / Sales -✔✔✔ANSWER-1 and 3 only
On January 1, 2014, shares of Company X trade at $6.50 per share, with
400 million shares outstanding. The company has net debt of $300
million. After building an earnings model for Company X, you have
projected free cash flow for each year through 2020 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free Cash Flow 110 120 150 170 200 250 280
You estimate that the weighted average cost of capital (WACC) for
Company X is 10% and assume that free cash flows grow in perpetuity
at 3.0% annually beyond 2020, the final projected year. Estimate the
present value of the projected free cash flows through 2 020,
discounted at the stated WACC. Assume all cash flows are generated at
the end of the year (i.e., no mid-year adjustment): - ✔ ✔✔ANSWER-
837 million
On January 1, 2014, shares of Company X trade at $6.50 per share, with
400 million shares outstanding. The
