WSP DCF CERTIFICATION PREP EXAM - (90 QUESTIONS) UP-TO-DATE ACTUAL EXAM
QUESTIONS AND 100% ACCURATE SOLUTIONS | VERIFIED ANSWERS - INSTANT PDF
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Candidate Name: ____________________________
Candidate ID: ________________________________
Date: _______________________________________
Examination Centre: __________________________
Time Allowed: 120 Minutes
Total Questions: 90 (This section contains Q1–Q30)
Candidate Instructions
• Answer all questions. Each question carries equal marks.
• Use of a calculator is permitted.
• Round answers to two decimal places unless otherwise stated.
• Select the most appropriate answer based on applied financial modeling principles.
• This assessment evaluates applied knowledge of discounted cash flow (DCF) modeling,
valuation mechanics, and financial interpretation.
,Disclaimer
This is a professionally designed simulation inspired by the format and rigor of financial
modeling certification exams. It is intended solely for educational and preparation
purposes and does not represent actual examination content.
This assessment is designed to evaluate a candidate’s ability to construct, interpret, and
analyze Discounted Cash Flow (DCF) models in a professional finance context.
Candidates will demonstrate proficiency in forecasting financial statements, estimating
free cash flows, calculating weighted average cost of capital (WACC), and interpreting
valuation outputs. The exam emphasizes real-world application of valuation principles
used in investment banking, equity research, and corporate finance roles.
Core Competency Areas:
• Financial Statement Forecasting
• Free Cash Flow Calculation (FCFF & FCFE)
• Discount Rate Estimation (WACC)
• Terminal Value Methodologies
• Sensitivity and Scenario Analysis
• Enterprise vs Equity Valuation
,Q1. A company reports EBIT of $500 million, depreciation of $80 million, and capital
expenditures of $120 million. If the tax rate is 25% and change in net working capital is
$30 million, what is the Free Cash Flow to Firm (FCFF)?
A. $355 million
B. $365 million
C. $375 million
D. $385 million
Correct Answer: 🔴 B. $365 million
Explanation: 🟡
FCFF = EBIT × (1 – Tax Rate) + Depreciation – CapEx – ΔNWC
= 500 × (1 – 0.25) + 80 – 120 – 30
= 375 + 80 – 150
= 365
A is incorrect due to miscalculation. C and D overstate FCFF by not properly deducting
working capital or CapEx.
Q2. In a DCF model, increasing the discount rate while holding all else constant will:
A. Increase enterprise value
B. Decrease enterprise value
, C. Have no effect
D. Increase terminal value only
Correct Answer: 🔴 B. Decrease enterprise value
Explanation: 🟡
A higher discount rate reduces the present value of future cash flows. A is incorrect as
value moves inversely. C is false. D is incorrect because both forecast period and terminal
value are affected.
Q3. Which of the following best represents unlevered free cash flow?
A. Cash flow available to equity holders only
B. Cash flow before interest payments
C. Net income plus depreciation
D. EBITDA minus taxes
Correct Answer: 🔴 B. Cash flow before interest payments
Explanation: 🟡
Unlevered FCF excludes financing effects, focusing on operations. A refers to FCFE. C is
incomplete. D ignores CapEx and working capital.
QUESTIONS AND 100% ACCURATE SOLUTIONS | VERIFIED ANSWERS - INSTANT PDF
DOWNLOAD
Candidate Name: ____________________________
Candidate ID: ________________________________
Date: _______________________________________
Examination Centre: __________________________
Time Allowed: 120 Minutes
Total Questions: 90 (This section contains Q1–Q30)
Candidate Instructions
• Answer all questions. Each question carries equal marks.
• Use of a calculator is permitted.
• Round answers to two decimal places unless otherwise stated.
• Select the most appropriate answer based on applied financial modeling principles.
• This assessment evaluates applied knowledge of discounted cash flow (DCF) modeling,
valuation mechanics, and financial interpretation.
,Disclaimer
This is a professionally designed simulation inspired by the format and rigor of financial
modeling certification exams. It is intended solely for educational and preparation
purposes and does not represent actual examination content.
This assessment is designed to evaluate a candidate’s ability to construct, interpret, and
analyze Discounted Cash Flow (DCF) models in a professional finance context.
Candidates will demonstrate proficiency in forecasting financial statements, estimating
free cash flows, calculating weighted average cost of capital (WACC), and interpreting
valuation outputs. The exam emphasizes real-world application of valuation principles
used in investment banking, equity research, and corporate finance roles.
Core Competency Areas:
• Financial Statement Forecasting
• Free Cash Flow Calculation (FCFF & FCFE)
• Discount Rate Estimation (WACC)
• Terminal Value Methodologies
• Sensitivity and Scenario Analysis
• Enterprise vs Equity Valuation
,Q1. A company reports EBIT of $500 million, depreciation of $80 million, and capital
expenditures of $120 million. If the tax rate is 25% and change in net working capital is
$30 million, what is the Free Cash Flow to Firm (FCFF)?
A. $355 million
B. $365 million
C. $375 million
D. $385 million
Correct Answer: 🔴 B. $365 million
Explanation: 🟡
FCFF = EBIT × (1 – Tax Rate) + Depreciation – CapEx – ΔNWC
= 500 × (1 – 0.25) + 80 – 120 – 30
= 375 + 80 – 150
= 365
A is incorrect due to miscalculation. C and D overstate FCFF by not properly deducting
working capital or CapEx.
Q2. In a DCF model, increasing the discount rate while holding all else constant will:
A. Increase enterprise value
B. Decrease enterprise value
, C. Have no effect
D. Increase terminal value only
Correct Answer: 🔴 B. Decrease enterprise value
Explanation: 🟡
A higher discount rate reduces the present value of future cash flows. A is incorrect as
value moves inversely. C is false. D is incorrect because both forecast period and terminal
value are affected.
Q3. Which of the following best represents unlevered free cash flow?
A. Cash flow available to equity holders only
B. Cash flow before interest payments
C. Net income plus depreciation
D. EBITDA minus taxes
Correct Answer: 🔴 B. Cash flow before interest payments
Explanation: 🟡
Unlevered FCF excludes financing effects, focusing on operations. A refers to FCFE. C is
incomplete. D ignores CapEx and working capital.
