27. If a company has an Enterprise Value of $1,000 milion and an Equity Value o

Question

27. If a company has an Enterprise Value of $1,000 milion and an Equity Value o 2 points) million, what is the company's net debt? a. b. c. d $250 million ($250 million) $150 million ($150 million) 28. Which type of "in-the-money" options may be excluded from the calculation of fully-diluted shares outstanding in a Comparable Companies Analysis? (2 points) a. Exercisable b. Net share settled c. Outstanding, but not exercisable d. If-Converted 29. Assuming no structural protections for the acquirer, in which structure does the acquirer assume the full risk of a decline in its share price: (2 points) a. Fixed exchange ratio b. Floating exchange ratio c. Fixed exchange ratio and floating exchange ratio involve the same risk for the acquirer Neither choice is correct d. 30. Which of the following are the MOST GENERIC AND WIDELY USED multiples in (2 points) Precedent Transactions Analysis? CIRCLE ALL THAT APPLY. a. b. c. d. Enterprise Value /Net Income Enterprise Value/LTM EBITDA Offer Price/ LTM Diluted Earnings Per Share Offer Price/ LTM EBITDA 31. The Premiums Paid Analysis is based upon the stock price of the company one or more days before the of the transaction. (2 points) BFIN 7225 - Final Exam - Fall 2017 20171030.docx Page 6 of 10

Explanation / Answer

27.

Enterprise value is calculated by following formula:

Enterprise value = Equity Value + Debt value – Cash value

$1,000 = $1,150 + (Debt value – Cash value)

Net debt = $1,000 - $1,150

              = -$150 million

Net debt of company is ($150 million)

Option (D) is correct answer.

28.

Exercisable “in the money” options may be excluding from the calculation of fully diluted share outstanding in a comparable company’s analysis.

Option (A) is correct answer.

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