An analyst gathered the following information regarding Darius Investments: Current year FCFF = $5.2 million Expected gr
Posted: Sun Jul 03, 2022 12:56 pm
An analyst gathered the following information regarding DariusInvestments: Current year FCFF = $5.2 million Expected growth ratein FCFF for the next three years = 14% Long-term constant growthrate from Year 4 onward = 6% WACC during the high-growth phase =18% WACC during the mature phase = 11% The company's excessearnings are closest to:
Select one:
a. $84,810
b. $75,350
c. $81,650
Sharon wants to value the equity of Moon Corporation (MC), aprivate company, using the GPCM. The stock is currently trading at$45 per share. She gathers the following information regardingcomparable public companies in the same industry as MC:
Sharon also obtains the following information regarding MC:
Given that the company has three million common sharesoutstanding, the stock is most likely:
Select one:
a.
Undervalued.
b.
Fairly valued.
c.
Overvalued.
A company that is in the earliest stages of developmentshould most likely be valued using:
Select one:
a.
The asset-based approach.
b.
The income approach.
c.
The market approach.
Which of the following premia is mostlikely added to the CAPM to make it more relevant forprivate company valuation?
Select one:
a.
Premium for systematic risk.
b.
Premium for large size.
c.
Premium for unsystematic risk.
When quantifying the lack of marketability discount, which ofthe following types of data would result in a marketabilitydiscount that is understated?
Select one:
a.
Restricted stock grants.
b.
IPOs.
c.
Put options.
For a large and privately held company, which of the followingvaluation methods would a private equity manager be unlikely touse?
Select one:
a.
EBITDA multiples
b.
EBIT multiples
c.
Net income multiples
Select one:
a. $84,810
b. $75,350
c. $81,650
Sharon wants to value the equity of Moon Corporation (MC), aprivate company, using the GPCM. The stock is currently trading at$45 per share. She gathers the following information regardingcomparable public companies in the same industry as MC:
Sharon also obtains the following information regarding MC:
Given that the company has three million common sharesoutstanding, the stock is most likely:
Select one:
a.
Undervalued.
b.
Fairly valued.
c.
Overvalued.
A company that is in the earliest stages of developmentshould most likely be valued using:
Select one:
a.
The asset-based approach.
b.
The income approach.
c.
The market approach.
Which of the following premia is mostlikely added to the CAPM to make it more relevant forprivate company valuation?
Select one:
a.
Premium for systematic risk.
b.
Premium for large size.
c.
Premium for unsystematic risk.
When quantifying the lack of marketability discount, which ofthe following types of data would result in a marketabilitydiscount that is understated?
Select one:
a.
Restricted stock grants.
b.
IPOs.
c.
Put options.
For a large and privately held company, which of the followingvaluation methods would a private equity manager be unlikely touse?
Select one:
a.
EBITDA multiples
b.
EBIT multiples
c.
Net income multiples