Trading Comps
Modeling Exam Wall
Street Prep
, Non-equity claims that should be deducted from Enterprise Value to find Equity Value
include all of the following EXCEPT: - CORRECT ANSWERS-Minority interest,
preferred stock, capitalized leases
LTM (Last Twelve Months) is calculated as follows - CORRECT ANSWERS-Latest
completed fiscal year results + Latest reported stub period results - Same stub period
results from one year ago
Company A shares are currently trading at $50 per share. A survey of Wall Street
analysts reveals that EPS expectations for Company A for the full year 2014 are $2.50
per share. Company A has 300 million diluted shares outstanding. Company A's major
competitors are trading at an average share price / 2014 Expected EPS of 23.0x.
Using the comparable company analysis valuation method, Company A shares are: -
CORRECT ANSWERS-7.5 per share undervalued
A debt holder would be primarily concerned with which of the following multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales - CORRECT ANSWERS-one and three only
Company A shares are currently trading at $20 per share. A survey of Wall Street
analysts reveals that EPS expectations for Company A for the full year 2014 are $1.50
per share. Company A has 200 million diluted shares outstanding. Company A's major
competitors are trading at an average share price / 2014 Expected EPS of 15.0x.
What is generally not considered to be a pre-tax non-recurring (unusual or infrequent)
item? - CORRECT ANSWERS-Extraordinary gains/losses
what is false about depreciation and amortization - CORRECT ANSWERS-D&A may be
classified within interest expense
Company X's current assets increased by $40 million from 2007-2008 while the
companies current liabilities increased by $25 million over the same period. the cash
impact of the change in working capital was - CORRECT ANSWERS-a decrease of 15
million
the final component of an earnings projection model is calculating interest expense. the
calculation may create a circular reference because - CORRECT ANSWERS-interest
expense affects net income, which affects FCF, which affects the amount of debt a
company pays down, which, in turn affects the interest expense, hence the circular
reference
Modeling Exam Wall
Street Prep
, Non-equity claims that should be deducted from Enterprise Value to find Equity Value
include all of the following EXCEPT: - CORRECT ANSWERS-Minority interest,
preferred stock, capitalized leases
LTM (Last Twelve Months) is calculated as follows - CORRECT ANSWERS-Latest
completed fiscal year results + Latest reported stub period results - Same stub period
results from one year ago
Company A shares are currently trading at $50 per share. A survey of Wall Street
analysts reveals that EPS expectations for Company A for the full year 2014 are $2.50
per share. Company A has 300 million diluted shares outstanding. Company A's major
competitors are trading at an average share price / 2014 Expected EPS of 23.0x.
Using the comparable company analysis valuation method, Company A shares are: -
CORRECT ANSWERS-7.5 per share undervalued
A debt holder would be primarily concerned with which of the following multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales - CORRECT ANSWERS-one and three only
Company A shares are currently trading at $20 per share. A survey of Wall Street
analysts reveals that EPS expectations for Company A for the full year 2014 are $1.50
per share. Company A has 200 million diluted shares outstanding. Company A's major
competitors are trading at an average share price / 2014 Expected EPS of 15.0x.
What is generally not considered to be a pre-tax non-recurring (unusual or infrequent)
item? - CORRECT ANSWERS-Extraordinary gains/losses
what is false about depreciation and amortization - CORRECT ANSWERS-D&A may be
classified within interest expense
Company X's current assets increased by $40 million from 2007-2008 while the
companies current liabilities increased by $25 million over the same period. the cash
impact of the change in working capital was - CORRECT ANSWERS-a decrease of 15
million
the final component of an earnings projection model is calculating interest expense. the
calculation may create a circular reference because - CORRECT ANSWERS-interest
expense affects net income, which affects FCF, which affects the amount of debt a
company pays down, which, in turn affects the interest expense, hence the circular
reference
