Financial Institutions and Markets
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Course Introduction
This course offers a comprehensive overview of financial institutions and markets, exploring their roles, functions, and impact on the broader economy. Students will examine the structure and operation of various financial intermediaries such as banks, insurance companies, mutual funds, and investment firms, as well as the organization and functioning of equity, debt, and derivative markets. Key topics include risk management, regulatory frameworks, and the influence of global financial events. By the end of the course, students will gain a solid understanding of how financial institutions and markets facilitate the flow of funds, support economic growth, and respond to challenges in an interconnected world.
Recommended Textbook
Investment Banking Valuation Leveraged Buyouts and Mergers and Acquisitions by Joshua Rosenbaum
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7 Chapters
201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/study-set/3930 Page 2
Chapter 1: Comparable Companies Analysis
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28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/78386
Sample Questions
Q1) Which financial metric can help indicate a company's size?
A)ROIC
B)EV
C)DOL
D)FCF Yield
Answer: B
Q2) A company's capital expenditures can be found on all of the following forms EXCEPT:
A)10-K
B)8-K
C)Proxy Statement
D)10-Q
Answer: C
Q3) An 8-K or current report may be helpful for a comparable companies analysis as it contains which of the following?
A)Management discussion and analysis
B)Pro forma adjustments
C)Material corporate events or changes
D)A comprehensive company overview
Answer: C
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Page 3
Chapter 2: Precedent Transactions Analysis
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) Calculate the percentage of premium paid given the following details:
<u><b>Details:</b></u>
Although rumors of the transaction leaked out yesterday, AcquirerCo officially announced today that it has agreed to buy TargetCo for $25.00 a share.TargetCo shares closed higher yesterday at $20.00.
A)25%
B)20%
C)15%
D)Not enough information
Answer: D
Q2) Which kind of buyer generally pays the most for an acquisition?
A)Financial buyer
B)Strategic buyer
C)Private equity
D)Financial sponsor
Answer: B
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Chapter 3: Discounted Cash Flow Analysis
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) Which of the following is a true statement about capital expenditures?
A)They represent actual cash outflows
B)They represent theoretical cash outflows
C)They represent intangible assets
D)They are expenses
Answer: A
Q2) All of the following assets can be amortized EXCEPT:
A)Copyrights
B)Patents
C)Goodwill
D)PP&E
Answer: D
Q3) In which calculation is the exit multiple method or the perpetuity growth method used?
A)Present value
B)Terminal value
C)WACC
D)FCF
Answer: B
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Page 5
Chapter 4: Leveraged Buyouts
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) What can protect investors from having debt with an attractive yield refinanced before maturity?
A)Floating interest rate
B)Fixed interest rate
C)PIK
D)Call premium
Q2) What is the primary metric used by sponsors to gauge the attractiveness of a potential LBO as well as the performance of their existing investments?
A)DCF
B)IRR
C)Precedent transactions analysis
D)Comparable companies analysis
Q3) An ABL facility is generally secured by a first priority lien on which of the following assets?
A)PP&E
B)Deferred tax asset
C)Inventory
D)Goodwill
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Chapter 5: Lbo Analysis
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28 Flashcards
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Sample Questions
Q1) The ending cash balance on the cash flow statement is linked to the:
A)Retained earnings
B)Cash and cash equivalents
C)Income statement
D)Long-term assets
Q2) In a traditional LBO analysis, it is common practice to assume an exit multiple that is:
A)Below the entry multiple
B)Above the entry multiple
C)Equal to the entry multiple
D)Both A and C
Q3) When building a debt schedule, what are interest rates typically based on for floating-rate debt instruments?
A)Federal funds rate
B)3 year treasury yields
C)Required rate of return
D)LIBOR
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Chapter 6: Sell-Side Ma
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33 Verified Questions
33 Flashcards
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Sample Questions
Q1) All of the following are advantages of a negotiated sale EXCEPT:
A)High degree of confidentiality
B)Fastest timing
C)Less disruptive to the business
D)Potential to "leave money on the table"
Q2) All of the following are valuation methodologies used by financial sponsors EXCEPT:
A)LBO model
B)Precedent transitions analysis
C)Comparable companies analysis
D)Accretion/dilution) analysis
Q3) The target's board of directors typically requires __________ before making a recommendation on whether to accept the offer and approve the execution of a definitive agreement.
A)Additional due diligence
B)A fairness opinion
C)A sum of the parts analysis
D)All of the above
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Chapter 7: Buy-Side Ma
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28 Flashcards
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Sample Questions
Q1) Which of the following in a buy-side M&A transaction employs analysis at different prices to help analyze and frame valuation?
A)Football field
B)AVP
C)Contribution analysis
D)Consequences analysis
Q2) Which of the following is the cheapest form of financing?
A)Cash on hand
B)Debt financing
C)Equity financing
D)Stock sale
Q3) In many instances, growth through acquisition is _________ than building a new business from scratch.
A)Cheaper
B)More time consuming
C)Faster
D)Both A and C
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