Stock Price
Shares Outstanding
Cash and Cash Equivalent
Debt Amount
EBIT
Company P
10
22000
2000
55000
25000
Company Q
5
13000
6000
50000
15000
Company R
15
30000
5000
25000
20000
Ques 1
The average EV/EBIT of the company is nearest to the value
1)12.8
2)13.4
3)13.9
4)14.4
Ques 2
Which of the following display the correct relationship between a valuation method and its
applicable terminal value?
i)
ii)
iii)
iv)
1)
2)
3)
4)
FCFE discount method – EV/EBITDA multiple
UFCF discount method – EV/EBIT multiple
EVA discount method – P/E multiple
DDM – P/B multiple
Both i) and ii)
Both i) and iii)
Both ii) and iv)
Only i)
Ques 3
A company X has a debt of INR 400 Cr. The WACC of the firm is 5.60%. The marginal tax rate is 30%
and the average unlevered beta is 1.2. Calculate the levered beta of the firm.
(Note: Cost of equity is 7% and cost of debt is 5%)
1)
2)
3)
4)
1.43
1.59
1.67
1.76
Ques 4
The retention rate of a company Y is 75%. Return of equity is 12% and the market capitalization rate
is 9%. If the expected Earning per share of the company is INR 15, find P/E.
1)
2)
3)
4)
30.9
31.4
31.9
32.4
Ques 5
The outstanding shares of a company named Craid is selling the market at a price of INR 103 per
share. The dividend of the company is expected to grow at 3% and the dividend received in the
current year is INR 30. Find the required rate of return and dividend yield, respectively.
1)
2)
3)
4)
38% and 30%
36% and 33%
30% and 33%
33% and 30%
Ques 6
The measure of a company X’s stock’s return relative to its market is 0.02% and the measure of how
the market moves relative to its mean is 0.08%. The company is expected to give INR 30 as dividend
in the upcoming year and dividends are expected to decline at 5% per year. The expected return on
market portfolio is 13% and the risk-free rate is given as 4%. Find market capitalization rate.
1)
2)
3)
4)
6.30%
6.50%
6.25%
6.85%
Ques 7
The equity value of a debt free company is INR 200 Cr. The free cash flow available to the firm is INR
160 Cr which is expected to grow at 7% forever. The cost of equity is 12%. Find the EV of the
company when the marginal tax rate is given as 26%.
1)
2)
3)
4)
INR 3200 Cr
INR 3360 Cr
INR 4800 Cr
INR 1600 Cr