30257 Corporate Valuation

Academic year: 2014/2015

MOCK EXAM
1. Explain the methods to estimate the Market Risk Premium (2 points)
2. Provide a definition of Economic Profit and discuss its relationship with the ROIC. Highlight how
the Economic Profit can be used to value a company (2 points)

3. Decompose the EV/EBITA multiples and describe the key drivers (3 points)
4. What does the continuing value of a company represent? What is the key value driver formula? (2
points)
5. Highlight the criteria to be followed when selecting the peer group to perform a trading multiples
valuation analysis (3 points)
6. Based on below data compute the CV of the company Alpha in year 1 (hint: derive growth rate by
alpha data) (3 points)

7. Compute the enterprise value of company Alpha with economic profit methodology (2 points)

8. Based on data of the previous exercise and assuming a Rf=5.8%, a MRP=6.3%, and a peer of
comparable companies, determine the Levered and Unlevered cost of equity for company Alpha,
(3 points)

9. Based on a constant long term growth rate (equal to g in year 1 and 2) Ktax=Kd, and
tax shields equal to: TS year 1= 10.2, TS year 2=12.6 compute the EV of company
Alpha with APV methodology (3 points)
10. Compute the ROIC and FCF of company Beta assuming an operating tax rate equal to
30% and knowing that: (2 points)