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Some have said that SPACs are a bit like venture capital for public investors.  While VC funds and SPACs both invest cash in early stage firms there are significant differences a) SPAC promoters get 20% of the stock of the SPAC if they make an acquisition, but VC firms get 20% of the profit (or the profit exceeding some benchmark level) on all investments in their VC fund b) VC firms line up investors to make a commitment to invest up to a certain dollar amount and call for that money as it is needed, whereas SPACs get the money at the time of the SPAC inception, but the money can be withdrawn by nvestors when it comes time to fund a deal if investors don’t like the deal. c) a) and b) d) none of the above

If franchise agreements have higher up front franchise fees and lower royalties as a percent of sales once the franchise is operating, it is more likely that a franchisor will not provide as much helpful assistance to the franchisee relative to the case of lower upfront fees and higher royalties on future sales.

A firm has the following data: Accounting Operating Income = EBIT = $100  Debt = $200 Market Value of equity = $1300 Cash and securities = $100 Operating Lease liabilities = $400 Interest rate used to value the liabilities = 4% What would the adjusted Enterprise Value / adjusted EBIT be once an adjustment is made for lease related liabilities  Answer to two decimal points with rounding.  For example if answer = 25.124 answer is 25.12

When a US restaurant chain expands internationally, the most common arrangement is to license the concept with international partners owning all or most of the restaurants and the US firm getting a percentage of sales for lending its brand a) This reflects the fact that US firms often lack expertise and the ability to direct management in foreign countries that may need things like menu adjustments and differing work rules.  Foreign ownership means those in charge have the proper incentives to succeed. b) This may reflect that US firms are not as concenred about potential hits to brand and reputation in the US when they relinquish control in foreign countries c) both a) and b) d) none of the above

The management of a firm seeking to do an acquisition might want to use stock to pay for shares of an acquisition target firm a) To enable shareholders of the target firm to avoid capital gain taxes today and thereby allow management to negotiate a lower takeover price b) when the target firm is large relative to the bidder to avoid having too much debt if the alternative is raising cash through a debt issue to pay the target firm’s sharehodlers in cash c) when the acquiring firm’s management views their own stock as being overvalued d) All the above e) a) and b) f) a) and c) g) b) and c) h) none of the above

I understand that exams will not be returned to me. Exam grades will be available in Canvas, and I can review the concepts on the exam with my instructor during Zoom office hours but tests are not released to students.

A firm enters into a 10 year equipment lease, with rent payments of $1 million a year due at the end of each year.  The lease runs over the entire life of the equipment and the equipment has no residual value:  it’s a financial lease.  The firm’s typical borrowing rate for secured debt is 5%. a) The firm has a debt liability equal to $8.45 million b) The firm’s total expense relating to the equipment lease will be interest expense plus depreciation expense and in the first year of  lease the total expense will exceed $1 millon. c) a) and b) d) none of the above

This question is 20% of EXAM4 BE SURE TO ANSWER! For the following xd (independent) and yd (dependent) data, write a script that uses n=10 segment, composite Trapezoid Rule to integrate the yd data from xd=0.0 to xd=1.0.  Cut-and-paste this data is ok.   xd yd 0.0 2.0000 0.1 2.1421 0.2 2.0757 0.3 1.7650 0.4 1.2863 0.5 0.7835 0.6 0.3803 0.7 0.1074 0.8 -0.1074 0.9 -0.3803 1.0 -0.7835

Based on the below data, what would be the best enterprise multiple to use for valuation purposes in the industry containing firms A,B,C Firm A Firm B Firm C 2019 2019 2019 Sales 2000 2200 2300 Operating Income   400   170   250 Depreciation     80   100   100 Amortization of acquired intangibles       0   100       0 Capital Expenditures   105     85     60 a) Enterprise Value / Sales b) Enterprise Value / EBITDA c) Enterprise value / EBIT

The final day to withdraw this semester is March 26 and I must withdraw myself before the deadline if that is necessary.