Suppose the MRP = 6% and your estimate the firm's Levered Beta to be 1.15. Your estimate of the Cost of Equity for the firm is 12.0%. What is the approximate yield on a 10-year US Treasury?
F402/560 // MID-TERM EXAM OVERVIEW
GENERAL INFORMATION
25 multiple choice questions; 4 points each; 100 possible points
Students may prepare 2 letter-sized pages of notes (front & back) for use with the exam
The notes will collected with the exam and destroyed after the exam is completed
The exam is the property of the instructor and will be collected after feedback and comments
QUESTION CONTENT OVERVIEW
| QUESTION | TOPIC/COMMENT |
| Impact of financing on NOPAT | |
| ROIC needed to achieve desired EVA | |
| What drives value? What doesn’t drive value? | |
| Calculate NOPAT given Capital & ROIC | |
| Calculate Horizon Value | |
| X, Y & Z … what’s the difference? | |
| Negative FCF … Positive EVA … meaning? | |
| Calculate ROIC given simple financial statement | |
| Calculate EVA given simple financial statement | |
| 10 | What goes into Invested Capital? What doesn’t? |
| 11 | Calculate Invested Capital from a simple financial statement |
| 12 | Calculate NOPAT from a simple financial statement |
| 13 | Calculate Free Cash Flow from a simple financial statement |
| 14 | Applying Mid-Year Discounting |
| 15 | How do you compute NOPAT under the Financing Approach? |
| 16 | Analyze the disposition of Free Cash Flow in a simple example |
| 17 | Use M&M theory to calculate NOPBT |
| 18 | Use M&M theory to calculate the Unlevered Cost of Capital |
| 19 | Use M&M Theory and the Value Driver Model to estimate Value |
| 20 | Evaluate the Price per Share of a company |
| 21 | Estimate Market Value Added from simple financial projections |
| 22 | Estimate Value from simple financial projections |
| 23 | Given r, c* & b what should a company do? |
| 24 | Given r, c* & b what should a company do? |
| 25 | Given r, c* & b what should a company do? |
