Corp Fin

Question 1

After-Tax Operating CF =

Answer 1

CF = (S - C) * (1 - T) + (T * D)

Question 2

TNOCF (Terminal Yr After-Tax Operating CF) =

Answer 2

SalT + NWCInv - T*(SalT - BT)

Question 3

Double Taxation System:

Answer 3

Effective Rate = Corp Rate + (1 - Corp Rate) * (Indy Rate)

Question 4

Expected Dividend

Answer 4

D0 + [ EPS growth * Target Payout * (1/N)]

Question 5

H-H Index

Answer 5

Sum[(Market Share x 100)^2]

Question 6

Post Merger HH

Answer 6

Not Concentrated / No Anti-Trust Actions

Question 7

Post-Merger HH 1000-1800

Answer 7

Moderately Concentrated / +100 = Possible Anti-Trust Challenge

Question 8

Post-Merger HH >1800

Answer 8

Highly Concentrated / +50 = Certain Anti-Trust Challenge

Question 9

Post-Merger Value to Acquirer

Answer 9

Vat = Va + Vt + S - C

Question 10

Gain to Target

Answer 10

TP = Pt - Vt

Question 11

Gain to Acquirer

Answer 11

S - TP = S - (Pt - Vt)

Question 12

Cash Divestiture

Answer 12

Direct Sale of a division to an outside party in exchange for cash

Question 13

Equity Carve-Out

Answer 13

Creates a new independent company by giving a proportionate equity interest in a sub to outside shareholders through a public offering of stock

Question 14

Spin-offs

Answer 14

Create a new independent company by distributing shares to existing shareholders of the parent company

Question 15

Split-offs

Answer 15

Allow shareholders to receive new shares of a division of the parent company by exchanging a portion of their parent company shares