NURSING TEST

Business Valuation Final Questions and Answers The primary methods used to calculate the value of privately held business interests in the income approach are: a. Capitalization of Earnings/ Cash Flows Method and Excess Earnings/Treasury Method b. Excess Earnings/Treasury Method and Discounted Earnings/Cash Flows Method c. Capitalization of Earnings/Cash Flows Method and Discounted Earnings/Cash Flows Method d. Discounted Earnings/Cash Flows Method and Price/EBITDA Method C Genera...

IB Prep - Valuation Qs Questions and Answers What are the 3 major valuation methodologies? Comparable companies, precedent transactions, and discounted cash flow analysis. Rank the 3 valuation methodologies from highest to lowest expected value. Trick question--there is no ranking that always holds. In general, precedent transactions will be higher than comparable companies due to the control premium built into acquisitions. Beyond that, a DCF could go either way and it's best to...

BIWS Valuation Guide Questions and Answers Why is P/E is the worst multiple (3)? -it includes non cash charges, is impacted by tax rates, and is not capital structure neutral Why don't we use FCF multiples even though they're more accurate than EBITDA or EBIT multiples (2)? -takes more time to calculate (convenience) -may not be standardized because companies include different items in the CFO in the SCF (comparability) Book Value is another word for shareholders' equ...

Valuation Exam 3 Questions and Answers matching discount rate and CFs -wacc is for expected cash flows -promised CFs need a higher discount rate b/c don't incl. risk -rf rate is for CFs from forward (market prices) why are PE hurdle rates so high? -very risky investments -PE firm provides expertise -hoped for CFs, not expected -opportunity costs -liquidity premium adjusted valuation process -focus on terminal value -CF insignificant in early periods -negotiate owners...

Unit 1 - Challenge 1 Goals and Organizations of Financial Management Questions and Answers Finance is the study of fund management and a. credit b. accounting c. economics d. asset allocation asset allocation The primary purpose of finance is to __________. a. manage assets in a way that maximizes returns b. pay off debt as quickly as possible c. study the effects of the economy on businesses d. keep track of a business's cash flow manage assets in a way that maximizes r...

Equity Valuation pt. 3 Questions and Answers A price earnings ratio that is derived from the Gordon growth model is inversely related to the: A) growth rate. B) dividend payout ratio. C) required rate of return. C) required rate of return. P/E is inversely related to the required rate of return, r, and directly related to the growth rate, g, and the dividend payout ratio, D/E. The primary difference between P/E multiples based on comparables and P/E multiples based on fundamentals...

LLC Valuations Questions and Answer Walk me from Revenue to EBITDA. Start with revenue and subtract cogs which gives me gross profit, and then from there I subtract my operating expenses which gives me my operating income. After that I add in additional profit which gives me my EBIT, and then from there I add in depreciation and amoritization From a high level, what are the two types of valuation? Relative valuation and intrinsic valuation What is a relative valuation? Comparin...

Business Valuations Questions and Answers An advocate: Introduces subjective factors and attempts to rely more heavily on qualitative factors. What are the three main reasons for tax related valuations? Estate tax, gift tax, and allocation of purchase price The major point(s) of Internal Revenue Code §2703 is/are... 1. An exception to restrictions on property exists for any option, agreement, right or restriction which (1) is a bona fide business arrangement, (2) is not a devi...

IB Accounting Valuation Qualitative Subset Questions and Answers How do you value a company? Intrinsic valuation (DCF) versus Relative valuation (Multiples) What is the appropriate discount rate to use in an unlevered DCF? Weighted average cost of capital (weighted average of cost of debt / cost of equity) What is typically higher, the cost of debt or the cost of equity? Cost of equity, comes with higher risk and larger upside potential. Debt is paid first in capital stack. ...

Valuation Terms Questions and Answers 3 main approaches to valuation Intrinsic, relative, asset-based What's a LBO? a group of investors (typically private equity firm) purchases a company and finances the transaction primarily with debt. When is asset-based valuation used a company liquidating a bankruptcy filing Most popular model for intrinsic valuation Discounted Cash Flow (DCF) Why is relative Valuation popular? Easy What do you estimate the value...