Finance Questions
- Why would two companies merge? What major factors drive mergers and acquisitions
- What are some common anti-takeover tactics?
- What is a LBO? Why lever up a firm?
- Why might a company choose to issue debt vs. equity?
- What could a company do with excess cash on the balance sheet?
- How would you calculate a firm's WACC? What would you use it for?
- What is the Beta and where would you find a firm's Beta? How and why would you unlever a Beta?
- What is the CAPM?
- How do you calculate the firm value for the following firm?
- What would greater impact a firms valuation, a 10% reduction in revenues or 1% reduction in discount rate?
- What major factors affect the yield on a corporate bond?
- How would you evaluate the creditworthiness of manufacturer with three factories in different locations throughout the US?
- Company A trades at a P/E of 20. Company B trades at a P/E of 10. Both are considering acquiring Company C, which trades at a P/E of 15. For which of the two acquiring companies would the deal be dilutive. For which would it be accretive? Explain why for each.
- Suppose you are buying a new fixed asset - part cash and part debt. Take through how it affects all the financial statements.
Financial market questions:
- What did our firm's stock close at yesterday?
- What is the DJIA at today? NASDAQ? S&P500? Long Bond? Fed funds rate?
- Where is the market going? Bond, equity and foreign exchange? Where do you think interest rates will be in the next 12 months?
- What happened in the markets in the past three months?
- Do you read the Wall Street Journal everyday? What's on the front page today?
- Do you follow an industry, a stock?
- What do personally invest in?
- What industry do you follow and what numbers do you look at to determine if a firm is doing well in the industry.
