Exam 22: Valuation and Financial Modelling: a Case Study

Use the tables for the question(s) below. Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation The following are financial ratios for three comparable companies: -Based upon the average EV/EBITDA ratio of the comparable firms,Ideko's target economic value is closest to:

Use the tables for the question(s) below. Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation -Goodwill is created only when a business is acquired and the amount paid for the business is ________ the value of the assets purchased.

The amortization expense may be used for ________ but for ________,the Canada Revenue Agency (CRA)requires companies to use Capital Cost Allowance (CCA).

Which of the following statements is correct?

We can use a one-year Canadian Treasury Bill rate as ________ interest rate when we convert an unlevered beta to a cost of capital for an acquired firm.

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 Pro Forma Balance Sheet for Ideko, 2005-2010 -Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation enterprise value of Ideko in 2010 is closest to:

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 Pro Forma Balance Sheet for Ideko, 2005-2010 -Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation EV/Sales ratio of Ideko in 2010 is closest to:

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -The unlevered beta for Luxottica is closest to:

Using the income statement above and the following information: Calculate Ideko's Free Cash Flow to the Firm and Free Cash Flow to Equity in 2009.

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -If the risk-free rate of interest is 6% and the market risk premium has historically averaged 5%,then the cost of capital for Oakley is closest to:

What is the purpose of the sensitivity analysis?

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 Pro Forma Balance Sheet for Ideko, 2005-2010 -Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation enterprise value of Ideko in 2010 is closest to:

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 Pro Forma Balance Sheet for Ideko, 2005-2010 -Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation levered P/E ratio of Ideko in 2010 is closest to:

Use the tables for the question(s) below. Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation The following are financial ratios for three comparable companies: -Based upon the average EV/EBITDA ratio of the comparable firms,if Ideko holds $6.5 million of cash in excess of its working capital needs,then Ideko's target market value of equity is closest to:

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -If the risk-free rate of interest is 6% and the market risk premium has historically averaged 5%,then the cost of capital for Luxottica is closest to:

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 -With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2008 is closest to:

Using the income statement above and the following information: Calculate Ideko's Free Cash Flow to the Firm and Free Cash Flow to Equity in 2007.

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 -With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2007 is closest to:

Use the tables for the question(s) below. Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation The following are financial ratios for three comparable companies: -Based upon the average EV/Sales ratio of the comparable firms,if Ideko holds $6.5 million of cash in excess of its working capital needs,then Ideko's target market value of equity is closest to:

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -If the risk-free rate of interest is 6% and the market risk premium has historically averaged 5%,then the cost of capital for Nike is closest to: