<<123456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899>> 1. In India, who is primarily responsible for regulating the restrictions on financing equity share acquisitions?RBISEBINCDIBCQuestion 1 of 99 2. According to Dan Ariely, how do humans typically assess value?Relative to other optionsWith an internal value meterBased on absolute worthBy market trendsQuestion 2 of 99 3. What does divestiture involve?Acquiring another company's divisionsSelling a company's divisions or assetsMerging with unrelated businessesJoint venture formationQuestion 3 of 99 4. What is the book value of a company derived from?Cash flow statementsIncome statementsBalance SheetStatement of retained earningsQuestion 4 of 99 5. Which defense mechanism involves shareholders' rights to buy stocks under favorable terms?Pacman defensePoison pillGolden parachuteStaggered boardQuestion 5 of 99 6. What occurs in a spin-off?A new company is formed by separating a business unitA company sells a portion of its assetsA parent company offers a subsidiary through an IPOA company forms a joint ventureQuestion 6 of 99 7. What are examples of intangible assets?Land and buildingsPatents and trademarksMachinery and equipmentRaw materialsQuestion 7 of 99 8. Which valuation method is rooted in comparing an asset's worth to similar assets' prices in the market?Relative Valuation ModelBook Value Approach ModelEnterprise Value Multiples ModelEquity Valuation Multiples ModelQuestion 8 of 99 9. Which divestiture type involves a partial sale of a company's assets through an IPO?Equity carve-outSell-offJoint ventureAsset saleQuestion 9 of 99 10. What is the major role of the Insolvency and Bankruptcy Code (IB(c) in Indian acquisitions?Facilitate leveraged buyoutsResolve distressed assets in a statutory processRegulate cross-border acquisitionsManage post-closing organization structuresQuestion 10 of 99 11. Market value of a company is defined by:Multiplying book value by market priceNumber of outstanding shares multiplied by share priceTotal assets minus total liabilitiesDividing market price by book valueQuestion 11 of 99 12. What valuation approach focuses on the value of the business itself, not considering equity?Equity Valuation Multiples ModelEnterprise Value Multiples ModelRelative Valuation ModelBook Value Approach ModelQuestion 12 of 99 13. What is a characteristic of an asset sale divestiture?Transferring ownership of the entire entitySelling specific assets or divisionsOffering a subsidiary through an IPOMerging with a new businessQuestion 13 of 99 14. In what scenario might a divestiture be considered by a company?When focusing on diversificationWhen looking to increase market shareWhen aiming to manage an excessively large companyWhen aiming for vertical integrationQuestion 14 of 99 15. Which of the following is considered a component of goodwill?Tangible assetsCustomer relationshipsCash reservesPhysical inventoryQuestion 15 of 99 16. Which aspect is NOT a key element of deal structuring in M&A?Choosing the acquisition vehiclePayment methodLong-term market analysisLegal form of the selling entityQuestion 16 of 99 17. Which multiple is primarily calculated by dividing enterprise value by EBITDA?EV/EBITDAP/EP/SEV/BVQuestion 17 of 99 18. Which financing source enjoys a more lenient regulatory environment compared to banks in India?Offshore lendersIndian banksNon-banking financial companies (NBFCs)Foreign portfolio investors (FPIs)Question 18 of 99 19. Brand recognition contributes to a company's success by:Generating direct cash flowIndirectly impacting market positionEliminating the need for advertisingReducing customer loyaltyQuestion 19 of 99 20. What defines a spin-off in business terms?Selling a company's divisionsCreating a new independent companySelling assets through an IPOForming a joint ventureQuestion 20 of 99 21. What is the emphasis of the price-to-sales (P/S) multiple?Market's readiness to pay per unit of salesRevenue per shareStock price fluctuationsMarket value of equity capitalQuestion 21 of 99 22. Which approach involves comparing a company's financial metrics to similar metrics of other companies in the same industry?Market approachIncome approachCost approachMarket Capitalization methodQuestion 22 of 99 23. What limits the ability of Indian banks to finance offshore organizations for Indian company share acquisitions?Indian exchange control restrictionsSEBI guidelinesNCD regulationsRBI guidelines on leveraged buyoutsQuestion 23 of 99 24. What does the income approach in valuation determine?Market worth through analysisFuture earnings or cash flowsFair Market Value of assetsFMV of net assetsQuestion 24 of 99 25. Software that a company develops internally is categorized as:Tangible assetsFinancial assetsIntangible assetsPhysical assetsQuestion 25 of 99 26. What occurs in a sell-off divestiture?Selling a portion of a subsidiary through an IPOSelling specific assets or divisionsSelling a division to another firmSelling a company's entire assetsQuestion 26 of 99 27. What crucial role does financial modeling play in M&A deals?Estimating taxation liabilitiesAnalyzing market trendsDetermining post-closing integrationAssessing financial feasibilityQuestion 27 of 99 28. What primarily dictates the maturity requirements for non-convertible debt obligations (NCDs)?SEBI guidelinesRBI regulationsIBC policiesConcentration limits set by FPIsQuestion 28 of 99 29. Franchises are examples of intangible assets that generate cash flow through:Product manufacturingLicensing agreementsEmployee salariesGovernment subsidiesQuestion 29 of 99 30. The cost approach is most beneficial for:Tech startupsAsset-intensive businessesService-based companiesFinancial institutionsQuestion 30 of 99 31. What regulatory body oversees the guidelines set for leveraging the Indian market for share acquisitions?SEBIRBIIBCNCDQuestion 31 of 99 32. What defines a demerger?A company sells a portion of its assetsA business unit forms a new companyTransferring an undertaking to another companySplitting a company's operations into unrelated marketsQuestion 32 of 99 33. Market Capitalization method calculates a company's value based on:Future cash flowsCurrent stock price and total outstanding sharesNet assetsMarket analysisQuestion 33 of 99 34. How can corporate or divisional structures benefit an acquiring entity?Facilitate post-closing integrationReduce tax liabilitiesLimit management controlSlow decision-makingQuestion 34 of 99 35. What is calculated by dividing the stock price by earnings per share?Market CapitalizationPrice-to-Book ratioPrice-to-Earnings ratioPrice-to-Sales ratioQuestion 35 of 99 36. Which valuation method is considered theoretically sound due to estimating future cash flows?Market CapitalizationEarnings MultiplesDiscounted Cash FlowComparable Transactions AnalysisQuestion 36 of 99 37. Comparable Companies Analysis (CC(a) is useful for:Valuing startupsValuing private companiesValuing mature companiesValuing conglomeratesQuestion 37 of 99 38. Which structure is suitable for transferring ownership to employees with tax advantages?Holding Company StructureJoint VenturesESOP structuresCorporate or Divisional StructureQuestion 38 of 99 39. What does Comparable Transactions Analysis (CT(a) consider?Market trendsPast transactions of a companyRecent mergers, acquisitions, or transactionsCompany's historical dataQuestion 39 of 99 40. Why might businesses hold cash as a non-operating asset?To speculate on commodity pricesTo avoid regulatory constraintsFor transactional purposes and protection against unplanned expensesTo increase dividend payoutsQuestion 40 of 99 41. Assets Based Valuation Method includes:Only tangible assetsOnly intangible assetsBoth tangible and intangible assetsFinancial assets onlyQuestion 41 of 99 42. Liquidation Valuation Method is used when a company:Is financially successfulIs in financial distressHas a high market capitalizationHas strong future projectionsQuestion 42 of 99 43. What is the relationship between convertible debt and preferred stock with enterprise value?Convertible debt reduces enterprise valuePreferred stock increases enterprise valueThey have no impact on enterprise valueBoth increase enterprise valueQuestion 43 of 99 44. In tax considerations for M&A, who primarily focuses on assessing the tax basis of acquired assets?SellerBuyerTarget companyShareholdersQuestion 44 of 99 45. Which valuation method is applicable to startups with complex capital structures?DCFLiquidation ValuationMarket CapitalizationOption Pricing ModelQuestion 45 of 99 46. How might economic cycles impact the valuation of cyclical firms?Reducing earnings volatilityCreating predictable growth patternsInfluencing growth rates due to fluctuations in earningsMinimizing the need for normalizationQuestion 46 of 99 47. In valuation, book value is derived from:Cash flow statementIncome statementBalance sheetStatement of retained earningsQuestion 47 of 99 48. What does market value represent?Total assets minus liabilitiesOutstanding shares multiplied by share priceBook value multiplied by market priceTotal earnings per shareQuestion 48 of 99 49. What does the valuation of e-commerce firms consider?Fixed technological advancementsStable consumer habitsRegulatory impacts on competitionConstantly evolving technology and its impact on the businessQuestion 49 of 99 50. The income approach in valuation focuses on:Comparing financial metrics to industry standardsDetermining the present value of expected future earningsAssessing the value of tangible assetsEstimating market capitalizationQuestion 50 of 99 51. Which method values a company based on its net assets?Cost approachLiquidation valuationComparable transactions analysisMarket capitalization methodQuestion 51 of 99 52. What does a merger typically involve?Splitting a single business into multiple entitiesTwo businesses merging into oneSelling off a company's divisionsCombining businesses with competitorsQuestion 52 of 99 53. Which type of merger often leads to a larger market share and potential monopoly?Horizontal mergerVertical mergerConglomerate mergerReverse mergerQuestion 53 of 99 54. Which valuation method is considered beneficial for asset-intensive businesses?Discounted Cash FlowComparable Companies AnalysisAssets Based ValuationEarnings MultiplesQuestion 54 of 99 55. Market capitalization is calculated by:Future cash flowsCurrent stock price multiplied by outstanding sharesNet tangible assetsComparable companies' financial metricsQuestion 55 of 99 56. When do vertical mergers occur?When companies in the same market sector mergeWhen unrelated businesses mergeWhen buyer-seller relationships mergeWhen two companies are technologically similarQuestion 56 of 99 57. What does the Price-to-Earnings (P/E) ratio compare?Stock price to book valueStock price to earnings per shareEarnings to dividendsDividends to stock priceQuestion 57 of 99 58. What defines a conglomerate merger?Merger of companies with similar market segmentsUnrelated businesses mergingCompanies in a "buyer-seller" relationship mergingMerging companies with similar fundamental technologiesQuestion 58 of 99 59. What is the core principle behind the Discounted Cash Flow method?Comparing companies in the same industryEstimating future cash flows and discounting them to present valueDetermining asset-based valueAnalyzing recent transactionsQuestion 59 of 99 60. Which analysis compares a target company with publicly traded peers in the same industry?Comparable Transactions AnalysisLiquidation ValuationComparable Companies AnalysisOption Pricing ModelQuestion 60 of 99 61. In which type of merger does the acquirer expand into similar business activities?Horizontal mergerConglomerate mergerCongeneric mergerReverse mergerQuestion 61 of 99 62. When is the Liquidation Valuation Method typically used?When a company is in financial prosperityWhen a company is in financial distressWhen a company is expanding rapidlyWhen a company has high market capitalizationQuestion 62 of 99 63. Which valuation method is particularly applicable to companies with complex capital structures?Comparable Transactions AnalysisDiscounted Cash FlowLiquidation ValuationOption Pricing ModelQuestion 63 of 99 64. What determines the book value of a company?Income statementsCash flow statementsBalance sheetRetained earnings statementQuestion 64 of 99 65. What helps assess the cyclicality, growth, and risk of emerging businesses?Earnings and price historyCapital reservesMarket saturationEconomic forecastsQuestion 65 of 99 66. Market value of a company is primarily based on:Future projectionsEarnings per shareOutstanding shares multiplied by share priceTangible assets onlyQuestion 66 of 99 67. What do newer firms face that creates difficulty in evaluation?Competition for evaluationLimited historical data and disclosuresExcessive financial statementsEstablished customer relationshipsQuestion 67 of 99 68. The income approach in valuation focuses on:Assessing tangible assetsDetermining present value of future earningsComparing companies in the same industryEstimating market capitalizationQuestion 68 of 99 69. Which step in the valuation of start-up firms involves predicting operating margin when growth stabilizes?Estimating reinvestment for growthAssessing current standingRevenue growth estimationStable-growth associated operating margin estimationQuestion 69 of 99 70. Which method values a company based on its net assets?Cost approachLiquidation valuationComparable transactions analysisMarket capitalization methodQuestion 70 of 99 71. Cash flows might be negative in early years for start-ups but hold the bulk of the total value, particularly in the:Initial yearsIntermediate yearsLater yearsTerminal yearsQuestion 71 of 99 72. Which valuation method is beneficial for asset-intensive businesses?Discounted Cash FlowComparable Companies AnalysisAssets Based ValuationEarnings MultiplesQuestion 72 of 99 73. Market capitalization is calculated by:Future cash flowsCurrent stock price multiplied by outstanding sharesNet tangible assetsComparable companies' financial metricsQuestion 73 of 99 74. How might holding companies be evaluated?Solely based on free cash flowConsidering potential investment opportunities and strategic decisionsIgnoring strategic decisions for evaluationWithout any considerations for potential investmentsQuestion 74 of 99 75. What determines equity value per share in the valuation of start-up firms?Estimating beta and cost of debtDiscount rates and reinvestment estimatesDeducting non-equity claims from equity valueCash flow assessment in early yearsQuestion 75 of 99 76. What does the Price-to-Earnings (P/E) ratio compare?Stock price to book valueStock price to earnings per shareEarnings to dividendsDividends to stock priceQuestion 76 of 99 77. What is the core principle behind the Discounted Cash Flow method?Comparing companies in the same industryEstimating future cash flows and discounting them to present valueDetermining asset-based valueAnalyzing recent transactionsQuestion 77 of 99 78. Which analysis compares a target company with publicly traded peers in the same industry?Comparable Transactions AnalysisLiquidation ValuationComparable Companies AnalysisOption Pricing ModelQuestion 78 of 99 79. When is the Liquidation Valuation Method typically used?When a company is in financial prosperityWhen a company is in financial distressWhen a company is expanding rapidlyWhen a company has high market capitalizationQuestion 79 of 99 80. Which valuation method is particularly applicable to companies with complex capital structures?Comparable Transactions AnalysisDiscounted Cash FlowLiquidation ValuationOption Pricing ModelQuestion 80 of 99 81. What is the foundational concept of the Discounted Cash Flow (DCF) approach?Future cash flows equal present valueFuture cash flows discounted at a fixed ratePresent value is independent of future cash flowsPresent value equals future cash flowsQuestion 81 of 99 82. What determines the book value of a company?Income statementsCash flow statementsBalance sheetRetained earnings statementQuestion 82 of 99 83. Market value of a company is primarily based on:Future projectionsEarnings per shareOutstanding shares multiplied by share priceTangible assets onlyQuestion 83 of 99 84. What determines how the discount rate is calculated in the DCF method?Predicted future cash flowsProjected market trendsLevel of risk associated with cash flowsIndustry benchmark ratesQuestion 84 of 99 85. The income approach in valuation focuses on:Assessing tangible assetsDetermining present value of future earningsComparing companies in the same industryEstimating market capitalizationQuestion 85 of 99 86. In DCF valuation, what factors are usually included in cash flow estimation?Operating income and taxes onlyOperating income, taxes, and CAPEXNet income and total liabilitiesCapital expenditures and market valueQuestion 86 of 99 87. Which method values a company based on its net assets?Cost approachLiquidation valuationComparable transactions analysisMarket capitalization methodQuestion 87 of 99 88. How is the discount rate commonly referred to in DCF valuation?Expected rate of returnCost of capitalForecasted ratePredictive interest rateQuestion 88 of 99 89. Which valuation method is beneficial for asset-intensive businesses?Discounted Cash FlowComparable Companies AnalysisAssets Based ValuationEarnings MultiplesQuestion 89 of 99 90. When forecasting cash flows in DCF, for how many years are projections typically made?2-4 years5-10 years15-20 yearsVariable, depending on industryQuestion 90 of 99 91. What is the purpose of estimating a terminal value in DCF?To calculate present valueTo assess initial investmentTo represent future growth beyond projectionTo determine current market valueQuestion 91 of 99 92. How are projected cash flows discounted in the DCF method?Multiplying by the discount rateDividing by the discount rateDiscount rate raised to the power of the number of yearsDividing by (1 + discount rate)nQuestion 92 of 99 93. What is the final step in the DCF valuation process?Summing projected cash flowsForecasting terminal valuesDiscounting projected cash flowsCalculating intrinsic valueQuestion 93 of 99 94. What does it suggest if the intrinsic value derived from DCF is higher than the current market price?OvervaluationUndervaluationFair market valueNo conclusion can be drawnQuestion 94 of 99 95. Which DCF model applies a discount rate equal to the weighted average cost of capital to the free cash flow to the firm?Zero Growth ModelEnterprise DCF ModelEquity DCF ModelConstant Growth ModelQuestion 95 of 99 96. What does the Equity DCF Model primarily consider?Cost of equityDividend growthCapital expendituresWeighted average cost of capitalQuestion 96 of 99 97. What does the Adjusted Present Value (APV) model include in its calculation?Unlevered equity cash flow and interest tax shieldWeighted average cost of capitalEnterprise value and terminal valueDividend yield and earnings per shareQuestion 97 of 99 98. In the Economic Profit Model, what does the discounting process involve?Unlevered cash flow and terminal valueWeighted average cost of capitalEconomic profit stream and invested capitalFree cash flow to equity and cost of equityQuestion 98 of 99 99. Which DCF model considers the current year dividend and the rate of return on equity?Zero Growth ModelEnterprise DCF ModelEquity DCF ModelConstant Growth ModelQuestion 99 of 99 Loading...
