Valuation

What cost of capital do we use to discount FCF using the APV method?

• rE

• rWACC

• rU

• Tc

Unlevered Cost of Capital can also be expressed as:

• Pre-Tax WACC

• rE

• WACC

• unlevered Value of the investment

What is the Interest Tax Shield

• Tax expenses resulting from the tax deductibility of debt

• Pretax Income

• Tax savings resulting from the tax deductibility of debt

• I don't know I don't care

In the FTE method we discount FCF using _____ cost of capital.

• unlevered

• levered

• weighted average

A debt equity ratio of 1,5 implies…

• for every 1,5 collected in debt there is 1 collected through equity

• for every 0,5 collected in debt there is 1 collected through equity

• for every 1 collected in debt there is 1,5 collected through equity

• for every 1 collected in debt there is 0,5 collected through equity

In order to calculate Weighted Average Cost of capital weights may be based on:

• Market values

• Book values

• Both

• None

Which method is easiest for you personally?

• WACC

• APV

• FTE