Practice

A DCF's Terminal Value is $1,000M, the Discount Rate is 10%, and the Terminal Value falls at the end of Year 5. What's the Present Value of the Terminal Value?

A company's Enterprise Value is $2,000M. It has $100M of Cash, $300M of Debt, no Preferred Stock, and 100M diluted shares outstanding. What's its Implied Share Price?

A company has $1,000 of NOLs at a 25% tax rate. The NOLs expire in Year 3, and the company expects $200 of Pre-Tax Income each year in Years 1 through 3. What Valuation Allowance should it record against the NOL Deferred Tax Asset?

A company's NTM TEV/EBITDA multiple is 10.0x, and its projected EBITDA for the 12-24 month period from now is $180M. What's its Future Enterprise Value in a Future Share Price Analysis?

A company's final projected year of FCF is $50M, its WACC is 10%, and its Terminal Growth Rate is 3%. What's its Terminal Value under the Perpetuity Growth Method?

Using CAPM, what's the Cost of Equity for a company with a Risk-Free Rate of 3.5%, a Beta of 0.9, and an Equity Risk Premium of 5.5% (rounded to one decimal)?

Using CAPM, what's the Cost of Equity for a company with a Risk-Free Rate of 4%, a Beta of 1.2, and an Equity Risk Premium of 6%?

A 10-year DCF has a stub-adjusted discount period of 9.334 for the last explicit forecast year. Under the Perpetuity Growth Method with the mid-year convention applied, what discount period should you use for the Terminal Value?

Using CAPM, what's the Cost of Equity for a company with a Risk-Free Rate of 4.5%, a Beta of 1.4, and an Equity Risk Premium of 5%?

A company has $900M of Equity and $300M of Debt. Its Cost of Equity is 11%, its Cost of Debt is 7%, and its tax rate is 24%. What's its WACC (rounded to one decimal)?

A company has EBIT of $200M, a 28% tax rate, D&A of $40M, CapEx of $60M, and an increase in Net Working Capital of $10M. What's its Unlevered FCF?

A company has $600M of Equity and $400M of Debt in its capital structure (at market value). Its Cost of Equity is 12%, its Cost of Debt is 6%, and its tax rate is 25%. What's its WACC?

A comparable company has a Levered Beta of 1.8, a Debt/Equity ratio of 1.0, and a 28% tax rate. What's its Unlevered Beta (rounded to two decimals)?

A company has EBIT of $80M, a 25% tax rate, D&A of $15M, CapEx of $20M, and an increase in Net Working Capital of $5M. What's its Unlevered FCF?

A company's final projected year of EBITDA is $120M, and you're assuming an 8.0x exit multiple. What's its Terminal Value under the Multiples Method?

A company has $750M of Equity and $250M of Debt. Its Cost of Equity is 10%, its Cost of Debt is 5%, and its tax rate is 30%. What's its WACC (rounded to one decimal)?

A company's final projected year of FCF is $100M, its WACC is 9%, and its Terminal Growth Rate is 2%. What's its Terminal Value under the Perpetuity Growth Method?

A company's Unlevered Beta (from comps) is 0.9. Its own target Debt/Equity ratio is 0.8 and its tax rate is 21%. What's its relevered (Levered) Beta, rounded to two decimals?

A comparable company has a Levered Beta of 1.5, a Debt/Equity ratio of 0.6, and a 25% tax rate. What's its Unlevered Beta (rounded to two decimals)?

A company's Enterprise Value is $1,500M. It has $80M of Cash, $250M of Debt, $40M of Preferred Stock, and 60M diluted shares outstanding. What's its Implied Share Price?

You're valuing a company on April 30th (245 days remain in the 365-day year) and using both a stub period and the mid-year convention. What's the discount period for the first year's cash flow?

A company has EBIT of $120M, a 21% tax rate, D&A of $30M, CapEx of $45M, and a decrease in Net Working Capital of $8M. What's its Unlevered FCF?

Same 10-year DCF, stub-adjusted period of 9.334 for the last forecast year, but this time using the Multiples Method for Terminal Value. What discount period should you use?

A company's final projected year of FCF is $70M, its WACC is 8%, and its Terminal Growth Rate is 2.5%. What's its Terminal Value under the Perpetuity Growth Method?