CA Final Business Valuation — practice questions
25 free MCQs with worked solutions. Tap any question for the answer + explanation, or practice them all in the app.
Practice CA Final Business Valuation in the app →Net Asset Value (NAV) approach to valuation values a business at:PE multiplier valuation arrives at value per share by multiplying:Free Cash Flow to Firm (FCFF) is typically defined as:Terminal Value in a DCF reflects:Economic Value Added (EVA) at its core measures:Gordon growth model: D1 = Rs 6, k = 14%, g = 5%. Intrinsic value per share is:DCF: Year 1 FCF Rs 200 crore, growing 8% perpetually, WACC 12%. Value of operating assets (in crore Rs) is:EV/EBITDA multiple of 10× on EBITDA Rs 50 crore implies enterprise value of:If FCFE Year 1 = Rs 40 crore, growth 6% perpetually, cost of equity 14%, equity value equals:Cost of equity using CAPM: Rf 6%, β 1.2, market premium 6%. Cost of equity =WACC for a firm with 60% equity (cost 14%) and 40% debt (after-tax cost 7%) equals:Replacement cost valuation is most appropriate when:An unlisted firm's beta is best estimated by:The chop-shop (break-up) valuation method aggregates:FCFF Year 1 = Rs 100, growth 5% for 3 years, then 2% perpetually; WACC 12%. Approximate enterprise value (Rs):DCF with TV using Gordon: FCF Year 5 = Rs 200, g = 3%, WACC 10%. Terminal value at end Year 5 equals:EVA: NOPAT Rs 80 crore; invested capital Rs 500 crore; WACC 12%. EVA equals:MVA equals market value of firm minus invested capital. If market cap is Rs 1,200 crore, debt Rs 300 crore andFree Cash Flow to Equity (FCFE) starting from FCFF: add after-tax interest, subtract net debt repayments. FCFFAn H-model values cash flows assuming linear decline in growth from high to stable. The model best suits:PEG ratio is computed as:If the same firm's DCF value is Rs 600 crore and relative-valuation EV (peer multiples) is Rs 900 crore, the mFirm value if growth equals discount rate (g = k) in Gordon model:DCF sensitivity to terminal-value assumption is highest when:Adjusted present value (APV) approach values a firm by separating: