Quiz 5 Leverage 3 Approaches

Question 1

Format the APV Approach

Answer 1

EBIT
Interest
EBT
Taxes
EAT
ReU
Value of Debt Capacity
Enterprise value
FMV of actual debt
FMV of equity

Question 2

Enterprise Value (FCFF) Approach Part 1

Answer 2

Debt capacity/enterprise value

WACC

Question 3

Enterprise Value (FCFF) Approach Part 2

Answer 3

EBIT
Interest
EBT
Taxes
EAT
WACC
Enterprise Value
FMV of actual debt
FMV of Equity

Question 4

Direct Equity (FCFE) Approach Step 1

Answer 4

ReL

Question 5

Direct Equity (FCFE) Approach Step 2

Answer 5

EBIT 
Interest (debt capacity times interest)
EBT
Taxes
EAT
ReL
Enterprise value
Debt Adjustment
FMV of Equity