27 Free CFA Level 1 Mock Exams Questions and Answers on Equity Analysis

Besides gaining knowledge about the CFA curriculum, there are a host of other all-important online practice that you’ll have to experience in order to start spanking that exam. 27 Free CFA Level 1 Mock Exams Questions and Answers on Equity Analysis is one of the most common mock exams you need to put in your pocket when starting the CFA program. Through many multiple choice questions with full answers, this free updated CFA mock exam showcases the core content in the CFA curriculum in the nice layout so that you can understand the basics even when not yet completing some tough topics. Explore our tests right now to get advantages over other candidates in the CFA exam. Shout out your points in the comment box after working out. Wish you luck!
To view full questions and answers, please kindly visit our site:  http://cfaexampreparation.com/750/27-free-cfa-level-1-mock-exams-questions-and-answers-on-equity-analysis/

competition, threats of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers

• Enterprise Value
• Porter's 5 Forces
• asset based models
• Growth industries

only Russel uses 3 tiered system

• industry experience curve
• Justified P/E
• Discounted cash flow models
• Industry classification systems

measures total company value aka cost to acquire the firm; potential problem is that a firm's debt information might not be available= market value of common and preferred stock + market value of debt - cash and short term investments

• Enterprise Value
• experience curve
• mature stage
• decline stage

shows the cost per unit relative to output

• decline stage
• industry experience curve
• experience curve
• Enterprise Value

Dividend Discount Model - stock's value is estimated as the PV of cash distributed to shareholdersFree Cash Flow to Equity Model - PV of cash available to shareholders after the firm meet its necessary capital expenditures and working capital expenses

• asset based models
• Asset based model
• Discounted cash flow models
• Multiplier model

most common denominator for EV, favored to net income because its usually positive. However, it includes non-cash revenues and expenses

• mature stage
• growth stage
• EBITDA
• decline stage

rapid growth, little competition, falling prices, increasing profitability

• mature stage
• decline stage
• growth stage
• Embryonic stage

an increase in the dividend payout ratio will reduce the firm's sustainable growth rate

• Discounted cash flow models
• Dividend displacement of earnings
• decline stage
• Defensive industries

reflects the firm's capacity to pay dividends, cash remaining after a firm meets all of its debt obligations provides for the capital expenditures necessary to maintain existing assets and to purchase the new assets needed to support the growth of the firm= net income + depreciation - increase in working capital - fixed capital investment - debt principal repayments + new debt issues = CF from operations - FCInv + net borrowing

• shakeout stage
• Discounted cash flow models
• growth stage
• Free Cash Flow to Equity (FCFE)

2 stage - most appropriate for a firm with high current growth that will drop to a stable rate3 stage - most appropriate for a firm still in a high growth stage

• decline stage
• shakeout stage
• 2 stage and 3 stage DDM
• mature stage

IV of stock is estimated as total asset value minus liabilities and preferred stock

• asset based models
• Multiplier model
• Justified P/E
• Asset based model

= expected dividend payout ratio / (k-g) where expected dividend payout ratio is D1/E1

• mature stage
• Asset based model
• Multiplier model
• Justified P/E

equity value is the market value of assets minus the market/fair value of liabilitiesmostly used for private companies

• Justified P/E
• asset based models
• Asset based model
• Multiplier model

slow growth, high prices, large investment, high risk of failure

• growth stage
• mature stage
• Embryonic stage
• decline stage

are those that least affected by the stage of the business cycle and include utilities, consumer staples and basic services

• Growth industries
• Enterprise Value
• decline stage
• Defensive industries

industry growth, profitability, risk associated with macroenomic, technological, demographic, governmental and social influences

• External forces on industry growth
• Growth industries
• Stages of the Industry Life Cycle
• Defensive industries

cumulative output and cost per unit

• Infinite period DDM
• industry experience curve
• Enterprise Value
• experience curve

(dividend to be received/(1+return)) + (year end price/(1+return))

• one-year holding period of DDM
• 2 stage and 3 stage DDM
• Infinite period DDM
• Enterprise Value

assumes the annual growth rate of dividends, g, is constant= D in one year / (k-g)

• Discounted cash flow models
• growth stage
• External forces on industry growth
• Gordon growth model (constant growth model)

have demand so strong they are largely unaffected by the stage of the business cycle

• Growth industries
• growth stage
• decline stage
• Defensive industries

Embryonic, growth, shakeout, mature, decline

• Stages of the Industry Life Cycle
• 2 stage and 3 stage DDM
• Defensive industries
• Growth industries

1. Ratio of stock price to fundamentals e.g. earning, book etc.2. Ratio of enterprise value to something elseEV = market value of all a firm's outstanding securities minus cash and short term investments

• Justified P/E
• asset based models
• Multiplier model
• Asset based model

slow growth, consolidation, high barriers to entry, stable pricing, superior firms gain market share

• decline stage
• shakeout stage
• growth stage
• mature stage

dividend / required return

• Defensive industries
• Justified P/E
• Enterprise Value
• Infinite period DDM

= (1-dividend payout ratio) ROE = retention rate ROE

• Justified P/E
• growth stage
• sustainable growth rate
• shakeout stage

negative growth, declining prices, consolidation

• shakeout stage
• mature stage
• decline stage
• growth stage

slowing growth, intense competition, industry overcapacity, declining profitability, cost cutting, increased failures

• Embryonic stage
• growth stage
• shakeout stage
• mature stage