Biws - Study guides, Class notes & Summaries

What are the 3 major valuation methodologies? - Answer-Comparable Companies, Precedent Transactions and Discounted Cash Flow Analysis. Rank the 3 valuation methodologies from highest to lowest expected value. - Answer-Trick question - there is no ranking that always holds. In general, Precedent Transactions will be higher than Comparable Companies due to the Control Premium built into acquisitions. Beyond that, a DCF could go either way and it's best to say that it's more variable than ot...

M&A Deals and Merger Models - BIWS Exam 2024/2025 Questions With Completed & Verified Solutions.

BIWS 400 Questions - Valuation Questions & Answers - Basic Questions And Answers What are the 3 major valuation methodologies? - ANS Comparable Companies, Precedent Transactions and Discounted Cash Flow Analysis. Rank the 3 valuation methodologies from highest to lowest expected value. - ANS Trick question - there is no ranking that always holds. In general, Precedent Transactions will be higher than Comparable Companies due to the Control Premium built into acquisitions. Beyond th...

How do you value banks and financial institutions differently from other companies? - Answer-You mostly use the same methodologies, except: • You look at P / E and P / BV (Book Value) multiples rather than EV / Revenue, EV / EBITDA, and other "normal" multiples, since banks have unique capital structures. • You pay more attention to bank-specific metrics like NAV (Net Asset Value) and you might screen companies and precedent transactions based on those instead. • Rather than a DCF,...

BIWS Merger Models (Mechanics) Exam 2024/2025 Questions With Completed & Verified Solutions.

What is a leveraged buyout, and why does it work? PE firm acquires a company using a combination of Debt and Equity, operates it for several years, and then sells the company at the end of the period to realize a return on its investment. During the period of ownership, the PE firm uses the company's cash flows to pay for the interest expense on the Debt and to repay Debt principal. It works because leverage amplifies returns: If the deal performs well, the PE firm will realize higher returns...

2. Wait a minute, how are Call Protection and "Prepayment" different? Don't they refer to the same concept? Call Protection refers to paying off the entire debt balance, whereas "Prepayment" refers to repaying part of the principal early, before the official maturity date. 3. What are some examples of incurrence covenants? Maintenance covenants? Incurrence Covenants: x Company cannot take on more than $2 billion of total debt. x Proceeds from any asset sales must be earmarked to repay debt...

Walk me through a basic LBO model - ANS "In an LBO Model, the first step is making some key assumptions about entry and exit multiple, leverage for the deal, interest rate on debt, and other variables. Next, you create a Sources & Uses section, which shows how you finance the transaction and how much sponsor equity is required. After that, you adjust the company's Balance Sheet for the new Debt and Equity figures, and also add in Goodwill & Other Intangibles on the Assets side to...

BIWS 400 Questions with complete solution 2023 Let's say I'm working on an IPO for a client. Can you describe briefly what I would do? - correct answer You meet with the client and gather basic information - such as their financial details, an industry overview, and who their customers are. You meet with other bankers and the lawyers to draft the S-1 registration statement - which describes the company's business and markets it to investors. You receive some comments from the SEC and kee...