Corporate Finance
Exam Review
Course Introduction
Corporate Finance introduces students to the fundamental principles and analytical tools essential for understanding how organizations manage their financial resources. The course explores key concepts such as time value of money, risk and return, valuation of securities, capital budgeting, cost of capital, and capital structure decisions. Students will examine how firms assess and pursue investment opportunities, structure their finances, and balance the interests of stakeholders, with an emphasis on the application of quantitative techniques to real-world corporate financial decisions. Through case studies and problem-solving exercises, participants gain practical insight into financial management's role in enhancing corporate value and strategic planning.
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) How should one adjust net income when using the If-Converted method for a comparable companies analysis?
A)Adjust net income downward
B)Adjust net income upward
C)Make no adjustment to net income
D)It depends
Answer: B
Q2) What is EBITDA a proxy for?
A)Sales
B)Growth
C)Cash flow
D)Debt
Answer: C
Q3) A company's capital expenditures can be found on all of the following forms EXCEPT:
A)10-K
B)8-K
C)Proxy Statement
D)10-Q
Answer: C
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Page 3
Chapter 2: Precedent Transactions Analysis
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78385
Sample Questions
Q1) In which document can one find recommendation from the target's board of directors on how shareholders should respond to a tender offer?
A)8-K
B)Schedule 13E-3
C)10-Q
D)Schedule 14D-9
Answer: D
Q2) Which structure generally gives greater certainty to the target's shareholders in terms of value received?
A)Floating exchange ratio
B)Fixed exchange ratio
C)They both are the same
D)It depends on the terms
Answer: A
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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) Calculate the discount factor for $1.00 received at the end of one year, assuming a 12% discount rate.
A).80
B).95
C).87
D).89
Answer: D
Q2) Which expense reduces the life of an intangible asset?
A)Depreciation
B)Accelerated Depreciation
C)Amortization
D)Capex
Answer: C
Q3) When determining a terminal value for a cyclical company, the banker must make sure that:
A)Earnings are normalized
B)Earnings are at a cyclical high
C)Earnings are at a cyclical low
D)The perpetuity growth method is used
Answer: A
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Chapter 4: Leveraged Buyouts
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78383
Sample Questions
Q1) What kind of loan is needed if the "take-out" securities deteriorate between the signing and the closing of an LBO?
A)Bridge loan
B)Second lien term loan
C)PIK
D)Mezzanine debt
Q2) A feature in the high yield market that allows the issuer to pay interest in the form of additional notes is called a:
A)Bridge loan
B)First lien
C)PIK
D)Term B loan
Q3) What is the classification of a covenant requiring a borrower to maintain assets, collateral, or other securities?
A)Affirmative
B)Negative
C)Maintenance
D)Financial
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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 to build the pro forma balance sheet once the pre-LBO model is finished?
A)CIM
B)Proxy statement
C)Sources and uses of funds
D)10-K
Q2) Calculate net interest expense given the following information.
<u><b>Details:</b></u>
Total interest expense: $25.0m
Interest income: $2.0m
Non-cash deferred financing fees: $3.0m
A)$23.0m
B)$20.0m
C)$26.0m
D)$30.0m
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7
Chapter 6: Sell-Side Ma
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33 Verified Questions
33 Flashcards
Source URL: https://quizplus.com/quiz/78381
Sample Questions
Q1) Which of the following buyers could potentially have limited access to the data room?
A)Direct competitor
B)Strategic buyer
C)Financial sponsor
D)All have equal access
Q2) In which type of sale process does a seller have the least leverage?
A)Negotiated sale
B)Stock sale
C)Targeted auction
D)Broad auction
Q3) The teaser and CIM are both part of the:
A)Financial exhibits
B)Marketing materials
C)Confidentiality agreement
D)Contract
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Page 8
Chapter 7: Buy-Side Ma
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78380
Sample Questions
Q1) When is goodwill created?
A)purchase price exceeds the net identifiable assets
B)Acquirer's P/E is higher than target's
C)Purchase price exceeds the net identifiable assets
D)Acquirer's P/E is lower than target's
Q2) When an acquirer buys a target in the same or a closely related business, synergies tend to be:
A)Nonexistent
B)Greater
C)Lower
D)Unknown
Q3) If a merger or acquisition is not immediately accretive, should the acquirer go through with the transaction? Why or why not?
A)No, the transaction will dilute the EPS and destroy shareholder value
B)Yes, accretion/dilution is not important
C)It depends; expected synergies and growth prospects may make the deal accretive and therefore create shareholder value
D)No, once a deal is dilutive it cannot become accretive
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