- What are the different ways to value a company?
- Walk me through a DCF valuation. What is free cash flow and how is it calculated? What would you use for a discount rate? How do you determine the terminal value?
- How do you calculate WACC?
- What is the formula for CAPM?
- What is beta? How and why do you unlever a beta?
- What is the current market risk premium? What is the current risk-free rate?
- What kinds of multiples do you think are most important when valuing a company and why? What are some reasonable ranges for these multiples?
- What makes a good comparable company for valuation purposes?
- What is the difference between enterprise value and equity value?
- Why should the fair market value of a company be the higher of its liquidation value and its going-concern value?
- What is an LBO? Why leverage up a firm?
- Lets say I want to value a natural gas pipeline, how would you suggest I do that? What do you think is the appropriate risk free rate to use with this pipeline? How would you finance buying a pipeline like this?
- What do you think an investment banker does?
- As a manufacturing firm, assume you are producing at full capacity. Marketing comes to you with a great new product idea and says the firm needs to begin producing it. What analysis would you do, and what things would you look at in response to marketing’s request?
Food For Though
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