Valuations Questions Asked In Interview #6

  1. How can you figure out how many diluted shares are in outstanding?

  2. When Does when EPS Become Negative?

  3. Using the If-converted approach, how do you calculate the number of fully diluted shares outstanding?

  4. How Net Share Settlement Calculation of Fully Diluted Shares Outstanding?

  5. What is the definition of a valuation multiple?

  6. A company trades at a 10x EV/EBITDA value ratio (based on its Current Enterprise Value). What exactly does that indicate?

  7. Which operational metric is most likely to have the closest correlation with EV/EBITDA multiples?

  8. What does the exchange have to offer?

  9. Did a valuation analysis to see how much would the common stockholders and preferred stockholders get in the current company without the recapitalization?

  10. What method would you use to forecast revenue?

  11. What is the difference between the NPV and XNPV Excel functions?

  12. What is a sensitivity analysis and how do you do it in Excel?

  13. What do you think creates a solid financial model, in your opinion?

  14. During the normalisation process, what kinds of changes are required? The subject company's inventory accounting policies are two major problems connected to probable normalisation changes for inventory goods.

  15. Which of the following is critical to perform when evaluating revenue accounts as shown on previous income statements?

  16. What are the reasons for preparing balance sheet normalisation adjustments?

  17. How can you tell whether a DCF depends too much on future assumptions?

  18. How do you see if your assumptions for Terminal Value are correct?

  19. Does it make sense to use the Multiples Method vs. the Gordon Growth Method?

  20. What's the connection between debt and equity cost of capital?

  21. Which of two identical companies, one with debt and the other without, will have the greater WACC?

  22. Why is it necessary to include Noncontrolling Interests in the Enterprise Value calculation?

  23. How do you calculate  value of diluted shares and diluted equity?

  24. Why do we bother calculating share dilution? Is there a significant difference?

  25. Why do you deduct Cash from the Enterprise Value formula? Is this usually the case?

  26. When calculating enterprise value, is it always accurate to add debt to equity value?

  27. Is it possible for a business to have a negative Enterprise Value?

  28. Is it possible for a firm to have a negative equity value? What exactly does that imply?

  29. To arrive at Enterprise Value, why do we add Preferred Stock?

  30. How do you factor for Convertible Bonds when calculating Enterprise Value?


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