Equities

Question 1

Effective tax rate

Answer 1

1-((1-tax corp)(1-tax div))

Question 2

Current Ratio

Answer 2

Current assets/ current liabilities

Question 3

Dividend yield

Answer 3

D0/P0 = r-g/1+g

Question 4

Value through P/CF ratio

Answer 4

V= FCFF*(1+g)/r-g

Question 5

Profit margin

Answer 5

NI/ sales

Question 6

Justified P/S ratio

Answer 6

(E0/S0)*(1-b)(1+g) / r-g

Question 7

P/S ratio

Answer 7

MV equity/ Total sales

Question 8

Justified P/B

Answer 8

ROE-g / r-g

Question 9

P/B ratio

Answer 9

MV equity / BV equity

Question 10

SH equity

Answer 10

Total assets - Total liabilities

Question 11

Leading P/E

Answer 11

1-b / r-g

Question 12

Trailing P/E

Answer 12

(1-b)(1+g) / r- g

Question 13

FCFF from EBIT

Answer 13

(EBIT*(1-tax)) + dep - FCinv- WCinv

Question 14

2-stage FCFF model

Answer 14

€FCFF_t/ (1+WACC)^t + FCFF_n+t/ (WACC- g) * 1/ (1+WACC)^n

Question 15

FCFF from EBITDA

Answer 15

(EBITDA(1-tax)) + (deptax)- FCinv-WCinv

Question 16

FCFF from CFO

Answer 16

CFO + int(1-tax) - FCinv

Question 17

FCFE frim CFO

Answer 17

CFO - FCInv + net borrowing

Question 18

FCFE

Answer 18

FCFF - int(1-tax) + net borrowing

Question 19

FCinv

Answer 19

1. Capital expenditures - proceeds sales long term assets
2. (Ending net PP&E - begin) + depr
3. Net purchase fixed (increase between years)

Question 20

FCinv

Answer 20

1. Capital expenditures - proceeds sales long term assets
2. (Ending net PP&E - begin) + depr

Question 21

FCFF from NI

Answer 21

NI+ NCC + int(1-tax) - FCInv- WCinv

Question 22

Equity value

Answer 22

FCFE*(1+g) / r-g

Question 23

Constant growth FCFF model

Answer 23

Firm V = FCFF(1+g) / WACC - g

Question 24

Firm value using FCFF

Answer 24

V = € FCFF_t / (1+WACC)^t

Question 25

Equity charge

Answer 25

Equity capital * cost of equity capital

Question 26

Capital charge

Answer 26

Total cost of capital (equity + debt)

Question 27

Residual income (3)

Answer 27

(ROIC - capital charge) * begin capital = NI - equity charge = B0+ (ROE-r/r-g)*B0

Question 28

Economic Value Added

Answer 28

EVA = NOPAT - (cost of capital*Total capital)

Question 29

Market Value Added

Answer 29

MVA = MV conpany - accounting BV Total capital

Question 30

PV cash flow

Answer 30

€ CF_t/ (1+r)^t

Question 31

FCFF

Answer 31

CF from operations - capital expenditures

Question 32

FCFE

Answer 32

FcFF - payments to debtholders

Question 33

Gordon Growth Model

Answer 33

V= D0(1+g) / r- g

Question 34

Value per share (PVGO)

Answer 34

V = E1/r + PVGO

Question 35

2 stage DDM

Answer 35

V = (SOM ((D0(1+g)^t )/(1+r)^t) ) + D0(1+gs^n)(1+gl) / (1+r)^n * (r-gl)

Question 36

H-model

Answer 36

D0(1+gl) / r-gl + D0*t/2*(gs-gl) / r- gl

Question 37

Enterprise value

Answer 37

MV common+pref + MV debt- cash - short term investments

Question 38

WACC

Answer 38

(We*re)+(Wd*rd*(1-tax))

Question 39

ROE

Answer 39

NI/ SH equity = NI/sales * sales/Total assets * Total assets/sh equity

Question 40

Sustainable growth rate

Answer 40

b*ROE

Question 41

Retention rate

Answer 41

b= 1- dividend pay out rate

Question 42

Dividend pay out rate

Answer 42

NI-D/NI

Question 43

Excess earnings method (EEM)

Answer 43

EEM = working capital + fixed assets + intangibles

Question 44

Discount lack of control

Answer 44

DLOC = 1- (1/control premium)

Question 45

Total discount

Answer 45

= 1-((1-DLOC)*(1-DLOM)

Question 46

Return equity building up

Answer 46

Rf+ equity risk premium + size premium

Question 47

Capitalized cash flow method

Answer 47

CCM = FCFE_1/ (r-g)

Question 48

Value firm EEM

Answer 48

V= work capital + fixed assets + intagibles

Question 49

Intangibles

Answer 49

= RI(1+g) / (r-g)

Question 50

Working capital

Answer 50

WC= account receivable + increase inventory- accounts payable- increase other liabilities

Question 51

Net borrowing

Answer 51

Increase in notes payable + increase long term debt

Question 52

Expanded CAPM

Answer 52

= Rf+beta*equity premium+ small stock+ company specific

Question 53

Build up method

Answer 53

= Rf+ equity risk prem+ small stock prem + industry risk prem + company risk prem