CFI FMVA FINAL EXAM 2025/2026 |
COMPLETE QUESTIONS AND ANSWERS
WITH RATIONALES | 100% VERIFIED<
RECENT UPDATE>
1. Readily available - ANSWER Comparable company analysis
2. Includes takeover premium/control premium - ANSWER Precedent
transaction analysis
3. Includes synergy value - ANSWER Precedent transaction analysis
4. Shows the value investors paid for the entire company (not just 1 share) -
ANSWER Precedent transaction analysis
5. Company A has 279,000 basic shares outstanding and 26,000 outstanding
options and warrants. The exercise price of these options is $3.75. The
company also has $200,000 of convertible bonds with an effective
conversion price of $4.00. The average market share price for the reporting
period is $7.50. What is the diluted shares outstanding using the treasury
stock method & if-converted methods? - ANSWER 342,000
6. Calculate a four-day moving average for the price of the stock for the end of
Day 7. Day 1 - 62.00; Day 2 - 56.00; Day 3 - 50.00; Day 4 - 60.00; Day 5 -
59.00; Day 6 - 55.00; Day 7 - 59.00; Day 8 - 63.00 - ANSWER 58.25
,7. What is the present value of a constant perpetuity of 25 per year where the
required rate of return is 5%? - ANSWER 500.00
8. The incremental annual depreciation expense as a result of Amazon's
acquisition of Facebook, is expected to be: - ANSWER $36,847
9. Additional annual interest expense due to new debt issued in relation to the
transaction is: - ANSWER $7,482
10.The total after-tax pro-forma adjustment to Amazon's net earnings is
expected to be: - ANSWER ($31,109)
11.The adjusted pro-forma net earnings for Amazon Inc. is expected to be: -
ANSWER $22,711
12.The implied enterprise value of Snap Inc., calculated using the assumptions
and acquisition premium provided, is: - ANSWER $91,669
13.The expected pro-forma share price of Amazon is expected to be: -
ANSWER $3,099.40
14.The pro-forma enterprise value of Amazon Inc. is expected to be: -
ANSWER $1,769,316
,15.Pro-forma FY+1 EPS for Amazon Inc. is expected to be: -
ANSWER $36.77
16.The effect of the transaction on FY + 1 EPS for Amazon Inc. is as follows: -
ANSWER Dilutive by 19.57%
17.Which is not a type of note found in a set of financial statements? -
ANSWER Significant internal controls
18.The result of =ROUND(513.2413,2) is __ - ANSWER 513.24
19.Which of the following is the correct definition for free cash flows to the
firm? - ANSWER EBIT x (1 - Tax Rate) + Depreciation +/- Changes in
Working Capital - Capex
20.Based on the course, which of the following ratios commonly estimates the
terminal value in a discounted cash flow (DCF) analysis? -
ANSWER EV/EBITDA
21.Weaknesses - ANSWER SWOT Analysis
22.Economic Forecasting - ANSWER PEST
23.Cost Leadership - ANSWER Competitive Advantage Analysis
, 24.Differentiation - ANSWER Competitive Advantage Analysis
25.Social Forecasting - ANSWER PEST
26.Opportunities - ANSWER SWOT Analysis
27.Potential new entrants and barriers to entry - ANSWER Porter's 5 Forces
28.Technological Forecasting - ANSWER PEST
29.Suppliers and their bargaining power - ANSWER Porter's 5 Forces
30.What does a diagram of a perfectly positive correlation look like? -
ANSWER A perfectly straight line that slopes from the bottom left to the
top right quadrant
31.What is the yield to maturity for a 3 year bond with a 10% annual coupon if
the bond is trading at par? - ANSWER 10.00%
32.If Beta Limited has opening PP&E balance of 150, a depreciation expense of
75, and a closing PP&E balance of 170, what is Beta's net capital
expenditure (or CAPEX)? - ANSWER 95
33.Which of the following best describes a leveraged buyout fund's
acquisitions? - ANSWER Investing in mature businesses
COMPLETE QUESTIONS AND ANSWERS
WITH RATIONALES | 100% VERIFIED<
RECENT UPDATE>
1. Readily available - ANSWER Comparable company analysis
2. Includes takeover premium/control premium - ANSWER Precedent
transaction analysis
3. Includes synergy value - ANSWER Precedent transaction analysis
4. Shows the value investors paid for the entire company (not just 1 share) -
ANSWER Precedent transaction analysis
5. Company A has 279,000 basic shares outstanding and 26,000 outstanding
options and warrants. The exercise price of these options is $3.75. The
company also has $200,000 of convertible bonds with an effective
conversion price of $4.00. The average market share price for the reporting
period is $7.50. What is the diluted shares outstanding using the treasury
stock method & if-converted methods? - ANSWER 342,000
6. Calculate a four-day moving average for the price of the stock for the end of
Day 7. Day 1 - 62.00; Day 2 - 56.00; Day 3 - 50.00; Day 4 - 60.00; Day 5 -
59.00; Day 6 - 55.00; Day 7 - 59.00; Day 8 - 63.00 - ANSWER 58.25
,7. What is the present value of a constant perpetuity of 25 per year where the
required rate of return is 5%? - ANSWER 500.00
8. The incremental annual depreciation expense as a result of Amazon's
acquisition of Facebook, is expected to be: - ANSWER $36,847
9. Additional annual interest expense due to new debt issued in relation to the
transaction is: - ANSWER $7,482
10.The total after-tax pro-forma adjustment to Amazon's net earnings is
expected to be: - ANSWER ($31,109)
11.The adjusted pro-forma net earnings for Amazon Inc. is expected to be: -
ANSWER $22,711
12.The implied enterprise value of Snap Inc., calculated using the assumptions
and acquisition premium provided, is: - ANSWER $91,669
13.The expected pro-forma share price of Amazon is expected to be: -
ANSWER $3,099.40
14.The pro-forma enterprise value of Amazon Inc. is expected to be: -
ANSWER $1,769,316
,15.Pro-forma FY+1 EPS for Amazon Inc. is expected to be: -
ANSWER $36.77
16.The effect of the transaction on FY + 1 EPS for Amazon Inc. is as follows: -
ANSWER Dilutive by 19.57%
17.Which is not a type of note found in a set of financial statements? -
ANSWER Significant internal controls
18.The result of =ROUND(513.2413,2) is __ - ANSWER 513.24
19.Which of the following is the correct definition for free cash flows to the
firm? - ANSWER EBIT x (1 - Tax Rate) + Depreciation +/- Changes in
Working Capital - Capex
20.Based on the course, which of the following ratios commonly estimates the
terminal value in a discounted cash flow (DCF) analysis? -
ANSWER EV/EBITDA
21.Weaknesses - ANSWER SWOT Analysis
22.Economic Forecasting - ANSWER PEST
23.Cost Leadership - ANSWER Competitive Advantage Analysis
, 24.Differentiation - ANSWER Competitive Advantage Analysis
25.Social Forecasting - ANSWER PEST
26.Opportunities - ANSWER SWOT Analysis
27.Potential new entrants and barriers to entry - ANSWER Porter's 5 Forces
28.Technological Forecasting - ANSWER PEST
29.Suppliers and their bargaining power - ANSWER Porter's 5 Forces
30.What does a diagram of a perfectly positive correlation look like? -
ANSWER A perfectly straight line that slopes from the bottom left to the
top right quadrant
31.What is the yield to maturity for a 3 year bond with a 10% annual coupon if
the bond is trading at par? - ANSWER 10.00%
32.If Beta Limited has opening PP&E balance of 150, a depreciation expense of
75, and a closing PP&E balance of 170, what is Beta's net capital
expenditure (or CAPEX)? - ANSWER 95
33.Which of the following best describes a leveraged buyout fund's
acquisitions? - ANSWER Investing in mature businesses
