[PDF] Top 20 CFA 2018 Level 2 Equity Quest bank Free Cash Flow Valuation QBank

... 17. Rob Lowe is valuing the equity of Vic Beverages. He estimates FCFE for 2016 by using a constant-growth model. The estimated value for FCFE for 2015 is $5. Lowe uses FCFE growth rate of 5% and required rate of ... Lihat dokumen lengkap

... after-tax cash flows from an investment plus the change in market value: Economic income = Cash flow + (Ending market value – Beginning market ... Lihat dokumen lengkap

... highest valuation multiples in the absence of an IPO, 2) specialized firms have the skill to bring their portfolio companies to the next level and sell to either a strategic investor or another PE ... Lihat dokumen lengkap

... The free cash flow is projected to grow at a constant rate of 6% per annum after four ...discounted cash flow approach the value per share of Gamma ... Lihat dokumen lengkap

... 8. B is correct. The pecking order theory, suggests that managers choose methods of financing according to a hierarchy that gives first preference to methods with the least potential information content (internally ... Lihat dokumen lengkap

... Absolute valuation models or intrinsic value models such as the dividend growth rate model and the free cash flow model value a company independent of peer ...The valuation is based on ... Lihat dokumen lengkap

... 7. Jeremy Kabelo, a newly hired fixed income analyst at a securities firm, makes the following statements regarding valuation of option-free bonds, “My method will calculate the same values for ... Lihat dokumen lengkap

... 20. B is correct. The residual dividend policy is based on paying out dividends from internally generated funds after financing the current year’s capital expenditures. Liz’s current earnings = $100 million. Expected ... Lihat dokumen lengkap

... 2. A is correct. Trader violated Standard VI (A) – Disclosure of Conflicts, by not reporting her directorship, stock ownership and cash compensation that she received on account of her position as a ... Lihat dokumen lengkap

... 4. B is correct. Using Equation 6: Equity risk premium = Div. yield on index based on next year aggregated forecasted dividends & aggregate market value + long-term earnings growth rate- current long-term ... Lihat dokumen lengkap

... An investment is NOT expected to yield abnormal positive returns when its market price is higher than its intrinsic value.. When market prices accurately reflect all information, investo[r] ... Lihat dokumen lengkap

... 3. CRG is in the manufacturing industry. The company has found it difficult to pay dividends over the years due to debt financing requirements. Moreover, even though the company has been profitable over the last few ... Lihat dokumen lengkap

... 17. C is correct. Differences in market values of individual companies in the same industry but trading in different countries is a common factor and is unlikely to create difficulty in relative valuations. The ... Lihat dokumen lengkap

... 4. Firm A is a struggling company in the manufacturing industry . Demand for the company’s products has declined markedly over the last two years and is unlikely to pick up again. Firm B is an established company in the ... Lihat dokumen lengkap

... 8. Northern Airways has a current book value of $15 per share. The company's expected long- term ROE is 15% and its cost of equity is 11%. The company maintains a dividend payout ratio of 70% and has constant ... Lihat dokumen lengkap

... 86. Alex Karachanis, CFA, is an independent financial advisor with a roster of over 100 clients. Along with advisory services, he also facilitates in executing the trades for his clients and manages their ... Lihat dokumen lengkap

... Di Stefano asked Starshah's Director of Strategic Planning, Keisha Simmons, to make a presentation to Starshah's board at the end of 2004 about the future growth of the firm. The news was sobering. Simmons told the board ... Lihat dokumen lengkap

... 23. An investor buys one share of a stock at $85 at t = 0. He buys an additional share for $90 at t = 1. The stock pays a dividend of $5 per share at t = 1 and t = 2. The investor sells both the shares at t = ... Lihat dokumen lengkap

... 11. Lincoln Ltd issued a $20,000 200-day note at 10%, and used the cash to pay for salaries. It also issued long-term debt worth $90,000 at 10% annually and used the cash to purchase equipment for the new ... Lihat dokumen lengkap

... Unethical behavior arises due to a potential conflict between the goals of the enterprise, or the goals of individual managers, and the fundamental rights of important stakeholders.. Sec[r] ... Lihat dokumen lengkap