The financial statement which reports revenues and expenses over time is the: *
• Income statement
• Balance sheet
• Cash flow statement
• MD&A

The financial statement which reports assets and liabilities is the: *
• Income statement
• Balance sheet
• Cash flow statement
• MD&A

Which of the following statements is true? *
• The balance sheet is a summary for the entire accounting period
• Assets + liabilities = equity
• The income statement is a summary of the company's cash position
• Assets – liabilities = equity

Bubble Gum Co.’s operating profit is 5,000. It has a litigation charge of 1,000 in SG&A. D&A is 500. What is EBITDA? *
• 4,000
• 4,500
• 5,500
• 6,500

Jackson issued 5,000 of new equity and used the proceeds to pay down 5,000 of long term debt. After the above transaction, which one of the following statements would be correct? *
• Total liabilities increased 5,000
• There is no net change in total liabilities and equity
• The net change in total liabilities and equity is 10,000
• Total equity decreased by 5,000

Sutton Place Beverages purchased machinery valued at 2,000 at the beginning of year 1 that had an estimated useful life of 10 years and a salvage or residual value of 500. Assuming straight-line depreciation, what is the net book value at the end of year 7? *
• 600
• 950
• 1,150
• 1,550

Which one of the following is least likely to appear in cash flow from financing? *
• Decrease in long term debt
• Share issuance
• Payment of dividends
• Capital expenditures
• Share buybacks
• Debt raise

Rossini recently acquired 100.0% of Verdi for 2,000 and financed the acquisition with 500 balance sheet cash, 700 new long term debt and the remainder of the purchase price with a new equity issuance. Pre-acquisition, the book value of Rossini’s equity was 3,000 while the book value of Verdi’s equity was 400. Using this information, calculate the total combo shareholders’ equity for Rossini after acquisition of Verdi. *
• 3,700
• 3,800
• 4,200
• 5,400

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Murray Hill Sweets acquires 100% of Paulus Hook Bitters for $5,000. Assuming the book value of Paulus Hook Bitters’ net assets is $3,800, there are no fair value step-ups and the target company has $300 of existing goodwill (which is part of the $3,800 in net assets), please calculate DEAL GOODWILL. Deal goodwill is equal to: *
• 1,200
• 1,500
• 1,600
• 1,800

Monet acquired 70.0% of Diego one year ago. At the acquisition date, Monet recorded noncontrolling interest of 200 related to its acquisition of Diego. Diego’s net income was 300 during the year and Diego paid its investors 200 in dividends during the year. Determine the ending balance of the noncontrolling interest on Monet’s balance sheet at the end of the year. *
• 230
• 270
• 300
• 330

Which one of the following statements regarding relative P/E analysis is true? *
• For all-stock financed deals, assuming no synergies, if the acquirer P/E is less than the acquisition P/E, the deal is accretive to EPS
• For all-debt financed deals, assuming no synergies, if the debt P/E is greater than the acquisition P/E, the deal is dilutive to EPS
• For all-stock financed deals, assuming no synergies, if the acquirer P/E is greater than the acquisition P/E the deal is accretive to EPS
• For all-debt financed deals, assuming no synergies, if the debt P/E is less than the acquisition P/E, the deal is accretive to EPS
Which one of the following statements is true? *
• Trading comparables analysis typically produces a higher valuation than transaction comparables
• LBO analysis is a majority stake valuation methodology dependent upon buyer's return requirements & availability of debt financing in the credit mkts
• Private equity buyers always rely upon multiple expansion to achieve their required return on their investments
• WACC represents the required return of all equity stakeholders and is the discount rate used to derive the target company's enterprise value In an LBO, if the entry equity is 100, exit equity is 200 and time period is 5 years, what is the IRR?*
• 12.9%
• 13.9%
• 14.9%
• 15.9%

If the acquisition share price is 10.00, the target shares outstanding is 100 and target net debt is 50, what is the transaction enterprise value? *
• 950
• 1,000
• 1,050
• 1,100

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In a DCF, if EBIT is 100, the long term ETR is 30%, D&A is 25, capex is 15 and the increase in OWC is 7, what is the free cash flow that year? *
• 23
• 73
• 87
• 97

If the target capital structure of Tony’s Treats is 40.0% equity and 60.0% debt, the cost of equity is 10.0%, the cost of debt is 7.0%, and the MTR is 30.0%, what is the WACC? *
• 3.9%
• 4.9%
• 5.9%
• 6.9%

If the 10 year government bond yield is 4.0%, levered beta is 1.8 and the market risk premium is 7.0%, what is the cost of equity? *
• 12.6%
• 14.6%
• 16.6%
• 18.6%

If enterprise value is 175, debt is 30, short term investments is 10 and diluted shares outstanding is 100, what is the implied share price? *
• 1.55
• 1.75
• 1.95
• 2.05

You are using your comparable company set to value Jimmy Jones & Co. The average EBITDA multiple of the comps is 7.0x. Jimmy Jones’ EBITDA is 200M, and their net debt is 50M. What is Jimmy Jones’ implied equity value? *
• 200
• 1,350
• 1,400
• 1,450

Thomas Equity Capital recently acquired Bob’s Burgers. Thomas requires a 30.0% return on its investments given a five year holding period. Calculate the minimum value of Bob’s equity on exit given the following information: LTM EBITDA at entry is 52.0, EBITDA entry multiple is 8.0x, debt raised to fund acquisition is 234.0 and projected year 5 EBITDA is 80.0. *
• 236.6
• 675.8
• 1,544.6
• 2,413.4

The financial statement which reports revenues and expenses over ti...