In: Finance
8. Which one is NOT a key financial characteristic to examine when screening for comparable companies?
a. Customers
b. Growth profile
c. Profitability
d. Industry
9. In Borland-Ashton acquisition, Ashton has lower multiples than its comparable companies. Based on the acquisition performance, which one of the following is true?
a. Ashton is a high quality & undervalued firm, which represents a buying opportunity
b. Ashton is a high quality & overvalued firm, which represents a selling opportunity
c. Ashton might have intrinsic shortcomings that justify a lower multiple
d. None of the above
10. A company with no debt in its capital structure would have a weighted average cost of capital equal to its _______.
a. Cost of equity
b. After-tax cost of debt
c. Cost of debt
d. Risk-free rate
11. Which of the following is NOT a key driver of a company’s projected FCF?
a. EBIT margins
b. Sales growth
c. Capex
d. Discount rate
Which one is NOT a key financial characteristic to examine when screening for comparable companies?
a. Customers
b. Growth profile
c. Profitability
d. Industry
(Answer: a. Customers )
In Borland-Ashton acquisition, Ashton has lower multiples than its comparable companies. Based on the acquisition performance, which one of the following is true?
a. Ashton is a high quality & undervalued firm, which represents a buying opportunity
b. Ashton is a high quality & overvalued firm, which represents a selling opportunity
c. Ashton might have intrinsic shortcomings that justify a lower multiple
d. None of the above
(Answer : c. Ashton might have intrinsic shortcomings that justify a lower multiple )
Which of the following is NOT a key driver of a company’s projected FCF?
a. EBIT margins
b. Sales growth
c. Capex
d. Discount rate
(Answer d. Discount rate)