# Financial Modelling And Valuation Test Part 3

## Dear Test TakerRule for Test-Thank You for Joining Quiz For Analyst Interview.Each Questions Graded One Mark Each.Total Number of Questions 15Note All Questions Are SuffledIf you have any query please drop your email on info@anaystinerview.com

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### Quiz Questions

• 1.
Q.1 What are the circumstances in which a strategic buyer might use an LBO analysis?
• A.
A. To understand the debt capacity of their company
• B.
B. To understand the price a financial sponsor bidder can afford to pay when competing for an asset in an auction process
• C.
C. To help spread comparable companiesâ€™ analysis
• 2.
Q2. In an LBO analysis, what are the most important variables to look at for sensitivity analysis? I. Purchase price II. Financing structure III. Historical dividends IV. Exit multiple
• A.
A. I and II
• B.
B. II and III
• C.
C. I, II, and IV
• 3.
Q3. What is the typical variation in IRR based on the year of exit?
• A.
A. Maintains its value throughout the investment horizon
• B.
B. Decreases as a result of slowing growth rates as well as the time value of money
• C.
C. Continues to grow indefinitely
• 4.
Q4. In an LBO model, how does the senior notes balance change over the course of a projected period of time?
• A.
A. Decreases
• B.
B. Increases
• C.
C. Stays constant
• 5.
Q5. What is the most important legal document that establishes a formal agreement between a buyer and a seller to purchase the object of their affection?
• A.
A. Confidentiality agreement
• B.
B. Indenture
• C.
C. Definitive purchase/sale agreement
• 6.
Q6. It is considered a bad transaction if the pro forma EPS of two combined companies is lower than the standalone EPS of the company that is being acquired.
• A.
A. Accretive
• B.
B. Dilutive
• C.
C. Consensus
• 7.
Q7. Deferred tax liabilities are calculated as
• A.
A. Goodwill less PP&amp;E
• B.
B. PP&amp;E multiplied by the acquirer tax rate
• C.
C. Tangible and intangible asset write-ups multiplied by the tax rate applicable to the acquirer
• 8.
Q8. What is the typical projection period of an LBO model for a potential debt provider in terms of years?
• A.
A. 1-2 years
• B.
B. 3-4 years
• C.
C. 7-10 years
• 9.
Q9.What is a Greenfield?
• A.
A. Building a new factory from scratch
• B.
B. Modifying /upgrading a preexisting factory
• C.
C. Integrating a newly purchased company quickly and efficiently
• 10.
Q10. When the pro forma earnings per share of two combined companies exceeds the earnings per share of the acquirer on a standalone basis, the transaction is said to be profitable.
• A.
A. Accretive
• B.
B. Dilutive
• C.
C. Consensus
• 11.
Q11. Which of the following are common types of synergies realized in M&amp;A transactions? I. Merger II. Revenue III. Cost IV. Stock
• A.
A. I and II
• B.
B. II and III
• C.
C. III and IV
• 12.
Q12. What is mean by conglomeration?
• A.
A. Corporation that is the largest amongst its competitors
• B.
B. Corporation that sells its products and services in several countries
• C.
C. Acquisition strategy whereby a company makes acquisitions in relatively unrelated business areas
• 13.
Q13. Which of the following factors contributes to the reduction of goodwill created during a merger and acquisition transaction?
• A.
A. Write-up of tangible assets
• B.
• C.
C. Future synergies
• 14.
Q14. The difference between the price paid for a target and its identifiable net asset value is referred to as
• A.
A. Tangible Value
• B.
B. Goodwill
• C.
C. Intangible value
• 15.
Q15. Which of the following are the two main marketing documents for an auction's first round?
• A.
A. Teaser &amp; confidentiality agreement
• B.
B. Teaser &amp; confidential information memorandum
• C.
C. Teaser &amp; bid procedures letter

### Quiz Outcomes

• 1.
Result 1
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