Calculate the levered beta for the target company.  The target company has an unlevered beta of 1.1, a debt-to-equity ratio of 47% and a marginal tax rate of 21%.  

When determining a terminal value for DCF analysis, there are two methodologies discussed in the chapter: EMM and PGM. Which requires a steady state at the end of the projection period?  

If the company increases their inventory, this is a _________ of cash. If the company decreases their accounts payable, this is a ____________ of cash.

Calculating the free cash flow for the target company can be challenging.  Which of the following is not a key driver of the target company’s projected free cash flow?  

Using the Capital Asset Pricing model to estimate the cost of equity will require an estimate of the risk-free rate. Which of the following is an acceptable proxy for the risk-free rate?  

Beta is a measure of risk. To calculate beta, calculate the covariance between ___________ and ___________.  

Which of the following is the most appropriate market risk premium to use in the calculation of cost of equity?  

The concept of a size premium somewhat contradicts the CAPM. With that said, bankers will likely include a size premium for small companies.  Which of the following best describes the rationale for such action:  

At times you will need to employe a mid-year convention for DCF valuation. What impact does this have on valuation?  

A 61 year old male presents with severe pain in the lower thoracic and upper lumbar spine region. He reports it is getting progressively worse and describes the pain as knife-like. The pain is mostly unchanged with trunk movement or rest, but it tends to feel worse in supine. Relevant PMH includes hypothyroidism, hypertension, hypercholesterolemia, depression, and a 40 year history of smoking 1 pack/day. Which of the following is the most likely cause of his pain: