Applied Investment Banking
Mock Exam
Course Introduction
Applied Investment Banking provides students with a comprehensive understanding of the fundamental practices and real-world applications within investment banking. The course covers key topics including financial statement analysis, valuation techniques, mergers and acquisitions, leveraged buyouts, and capital raising through debt and equity markets. Students will engage in practical case studies and simulations that mirror actual investment banking transactions, providing hands-on experience in deal structuring, pitchbook development, and due diligence processes. Emphasis is placed on the ethical considerations and regulatory environment governing the industry, preparing students to operate effectively in this competitive sector.
Recommended Textbook
Investment Banking Valuation Leveraged Buyouts and Mergers and Acquisitions by Joshua Rosenbaum
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7 Chapters
201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/study-set/3930 Page 2
Chapter 1: Comparable Companies Analysis
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78386
Sample Questions
Q1) Calculate the compounded annual growth rate CAGR) if revenues grew from $50.0m in 2005 to $350.0m in 2012.
A)32%
B)24%
C)55%
D)18%
Answer: A
Q2) Calculate COGS given the following information. Sales: $800.0m
SG&A: $250.0m
EBITDA: $300.0m
D&A: $50.0m
A)$250.0m
B)$200.0m
C)$500.0m
D)$300.0m
Answer: D
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Chapter 2: Precedent Transactions Analysis
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78385
Sample Questions
Q1) Which form contains relevant data for an LBO in a private transaction involving non-public financing?
A)S-4
B)8-K
C)13E-3
D)None of the above
Answer: D
Q2) Determine the type of exchange ratio in the following Stock-for-Stock transaction.
<u><b>Transaction Details:</b></u>
AcquirerCo will acquire TargetCo for stock.TargetCo stockholders will receive $40.00 of AcquirerCo's common stock for each share of TargetCo common stock they hold.
A)Fixed exchange ratio
B)Secure exchange ratio
C)Floating exchange ratio
D)Linear exchange ratio
Answer: C
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Page 4
Chapter 3: Discounted Cash Flow Analysis
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78384
Sample Questions
Q1) What happens to WAAC as the proportion of debt in a capital structure increases?
A)It stays the same
B)It decreases
C)It increases
D)It depends
Answer: B
Q2) In which calculation is the exit multiple method or the perpetuity growth method used?
A)Present value
B)Terminal value
C)WACC
D)FCF
Answer: B
Q3) Which of the following is a true statement about capital expenditures?
A)They represent actual cash outflows
B)They represent theoretical cash outflows
C)They represent intangible assets
D)They are expenses
Answer: A
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Page 5
Chapter 4: Leveraged Buyouts
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78383
Sample Questions
Q1) If an LBO target does not repay any debt during the investment horizon, how can the sponsor still realize a return?
A)If the target reinvests its cash into the business, the sponsor can realize a return by selling the target at a higher enterprise value
B)The sponsor cannot realize a return, as the enterprise value did not increase
C)The sponsor cannot realize a return, as the value of the sponsor's equity could not increase
D)It depends on the sponsor's internal rate of return
Q2) An ABL facility is generally secured by a first priority lien on which of the following assets?
A)PP&E
B)Deferred tax asset
C)Inventory
D)Goodwill
Q3) Which of the following forms of financing tends to be the least flexible?
A)Bank debt
B)Mezzanine debt
C)Equity contribution
D)High yield bonds
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Page 6
Chapter 5: Lbo Analysis
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78382
Sample Questions
Q1) What is needed in order to complete the pro forma income statement from EBIT to net income?
A)Balance sheet
B)Debt schedule
C)CIM
D)LIBOR curve
Q2) In a traditional LBO analysis, it is common practice to assume an exit multiple that is:
A)Below the entry multiple
B)Above the entry multiple
C)Equal to the entry multiple
D)Both A and C
Q3) In which of these scenarios is a revolver draw necessary?
A)When cash available for optional debt repayment is positive
B)When cash available for optional debt repayment is negative
C)When cash available on the balance sheet is zero
D)When there is an increase in net working capital
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Chapter 6: Sell-Side Ma
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33 Verified Questions
33 Flashcards
Source URL: https://quizplus.com/quiz/78381
Sample Questions
Q1) In which of the following scenarios would a sell-side advisor consider running a broad auction?
A)Seller is flexible regarding timing
B)Seller is flexible regarding potential business disruption
C)Confidentiality is not a priority
D)All of the above
Q2) All of the following are disadvantages of which auction type?
\(\bullet\)Potential to "leave money on the table"
\(\bullet\)May afford buyers more leverage in negotiations
\(\bullet\)Lesser degree of competition
A)Broad auction
B)Targeted auction
C)Negotiated sale
D)Silent auction
Q3) What happens in a two-step tender process if the buyer fails to acquire enough of the target's shares within 20 business days?
A)The merger is "busted"
B)The buyer gets additional time
C)A shareholders meeting must be completed
D)None of the above
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Chapter 7: Buy-Side Ma
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78380
Sample Questions
Q1) Which is the most common form of M&A deal structure?
A)Stock sale
B)Asset sale
C)Section 338 election
D)Cash on hand
Q2) In many instances, growth through acquisition is _________ than building a new business from scratch.
A)Cheaper
B)More time consuming
C)Faster
D)Both A and C
Q3) An all-debt financing structure is typically:
A)The most dilutive
B)The most accretive
C)Optimal
D)Balanced
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Page 9