practice A company has tax loss carryforwards that are bigger than their expected earnings for next year. What rate do they expect to pay for taxes next year? a) 0% b) 20% c) 35% B) Which tax rate used to be higher? d) The rate on a company's non-US business e) The rate on a company's US business C) When goodwill is impaired because its market value has dropped below its book value, what is the impact for a company? Its earnings and free cash flow are reduced Its earnings are reduced but free cash flow is not impacted Its earnings are not impacted but free cash flow is reduced Neither its earnings nor its free cash flow are impacted D) Which division is typically not valued using the free cash flow valuation method that we are using for complete companies? a) Industrial division b) Financial subsidiary c) Retail division d) Software division E) What is part of Enterprise value rather than part of NonEquity Assets and Liabilities? Discontinued Operations Finance Subsidiaries Goodwill Unfunded Pension and Other Postretirement Liabilities F) What is a key considerations in looking at shares outstanding (moving to fully diluted)? Convertible bonds outstanding Joint ventures Minority interests Preferred Stock outstandings G) Which would be considered excess real estate? A dedicated home office facility An old facility totally rented out to third parties Property owned for manufacturing plants Warehouses H) Typically, which combination is not a tradeoff (for one to go up the other usually goes down)? Debt leverage vs. rating and cost of debt capital Pricing/profit margin vs. sales growth Return on invested Capital and Weighted Average Cost of Capital