Finance Society Jeopardy 2018

Accounting

100

SG&A stands for this

Selling, General, and Administrative

200

This expense gets deducted from Revenue to get Gross Profit

COGS (Cost of Goods Sold)

300

The names of the four financial statements

Income statement, balance sheet, cash flow statement, statement of shareholders' equity

400

This principle forms the basis for accrual accounting and starts with the letter "M"

Matching Principle

500

This is the range of ownership stakes in subsidiary holdings that would be accounted for under the Equity Method

20%-50% 

Capital Structure

100

These are the two ways to fund a company

Equity and Debt

200

This is the formula for Enterprise Value

Equity Value + Debt - Cash

300

This is always the most expensive form of financing (the one with the highest cost)

Equity

400

This is the equity value of a company with an EBITDA of $50m, valued at 4x EBITDA, book value of senior debt of $100m, and book value of junior debt of $200m

$0

500

These are any two of the six conditions to the Miller-Modigliani Theorem

No taxes, no agency costs, no signalling, no bankruptcy costs, perfectly efficient capital markets, perfectly symmetric information

Intrinsic Valuation

100

WACC stands for this

Weighted average cost of capital

200

This is the formula for unlevered free cash flow

EBIT(1-t) + D&A - CapEx - Increases in NWC

300

These are the two methods of calculating terminal value

Gordon Growth, Multiples Method

400

This is the value of a business growing at 10% every year with cash flows of $10m and WACC of 20%

$110m (also accepted: $100m, if $10m is next year's cash flow)

500

These are the three factors of the Fama-French Three-Factor Model

Market Risk (just like CAPM), Size Risk, Price-to-Book Risk

Relative Valuation

100

This is an example of a valid valuation multiple

Anything that is correct (LOL)

200

This is what EBITDAR stands for

Earnings before interest, taxes, D&A, and rent

300

This is the reason that Warren Buffett hates using the EV/EBITDA valuation multiple

It fails to account for CapEx in any capacity

400

This is the name of the process of "cleaning" GAAP financials to more easily compare companies

Normalization

500

This is an example of a REIT-specific multiple

P/FFO, P/AFFO (Price to (Adjusted) Funds from Operations)

Fun

100

This Stern professor is married to Janet Yellen

George Akerlof

200

These are the current Finance Society Presidents

Lia Wei and Natasha Lim

300

This is the largest LBO in history

Energy Future Holdings, fka TXU Corporation

400

This Stern alumnus has an NYU school named after them but is not Leonard Stern

Laurence "Larry" Tisch

500

What is the yield on the 10-year treasury as of yesterday's close?

3.03% (100 points for anything above 3%)