(: M&A Exam 2 - Complete Study Guide and Practice Test Review)
When there are limited (or no) pure play companies, which valuation method should be used?
a) Comparable companies analysis
b) Precedent transaction analysis
c) Vertical analysis
d) Discounted cash flow analysis
d) Discounted Cash flow analysis
What is NOT a reason why transaction comps generally provide a higher multiple range than
trading comps?
a) Buyers pay control premiums
b) Buyers often have the opportunity to realize synergies
c) Buyers receive the right to control decisions
d) Transaction comps are more accurate than trading comps
d) Transactions comps are more accurate than trading comps
What situation would generally result in a lower purchase price of a company?
a) The seller is in need of cash and is selling a non-core business
b) The target company is shopped to prospective buyers through an auction
c) The target company is seeking alternatives to a hostile bid
d) The buyer seeks to create synergies
a) The is in need of cash and is selling a non-core business
How is the equity value calculated for an M&A transaction when the target company is private?
a) Share price multiplied by shares outstanding
b) Acquirers price per share multiplied by shares outstanding
c) Enterprise value less assumed and/or refinanced net debt
d) There is no equity value for a private company
c) Enterprise value less assumed and/or refinanced net debt
Which form of consideration typically triggers a taxable event for the targets shareholders?
a) All-cash
b) Stock for Stock
c) Cash/Stock mix
d) None
All-cash
In a DCF analysis, the targets projected FCF and terminal value are discounted to the present and
summed to calculate the targets:
a) Enterprise Value
b) Market Cap
c) Equity Value
d) Current value
a) Enterprise value
3/7/2026, 6:26:28 PM
When there are limited (or no) pure play companies, which valuation method should be used?
a) Comparable companies analysis
b) Precedent transaction analysis
c) Vertical analysis
d) Discounted cash flow analysis
d) Discounted Cash flow analysis
What is NOT a reason why transaction comps generally provide a higher multiple range than
trading comps?
a) Buyers pay control premiums
b) Buyers often have the opportunity to realize synergies
c) Buyers receive the right to control decisions
d) Transaction comps are more accurate than trading comps
d) Transactions comps are more accurate than trading comps
What situation would generally result in a lower purchase price of a company?
a) The seller is in need of cash and is selling a non-core business
b) The target company is shopped to prospective buyers through an auction
c) The target company is seeking alternatives to a hostile bid
d) The buyer seeks to create synergies
a) The is in need of cash and is selling a non-core business
How is the equity value calculated for an M&A transaction when the target company is private?
a) Share price multiplied by shares outstanding
b) Acquirers price per share multiplied by shares outstanding
c) Enterprise value less assumed and/or refinanced net debt
d) There is no equity value for a private company
c) Enterprise value less assumed and/or refinanced net debt
Which form of consideration typically triggers a taxable event for the targets shareholders?
a) All-cash
b) Stock for Stock
c) Cash/Stock mix
d) None
All-cash
In a DCF analysis, the targets projected FCF and terminal value are discounted to the present and
summed to calculate the targets:
a) Enterprise Value
b) Market Cap
c) Equity Value
d) Current value
a) Enterprise value
3/7/2026, 6:26:28 PM
