Interview Questions - Answered.docx

1. Net Debt is gross Debt less cash. It used along equity value to calculate the total enterprise value, because it represents the part destinated to the debtholders 2. Systematic risk, which is included in the market risk premium 3. 7,5degress (clockwise) 4. Deferred taxes are taxes to be paid in the future. They might originate from time differences between the book and taxable profit 5. I think they will slightly decrease. Central bank might get a little aggressive, given that inflation is under control, to stimulate further growth 6. WHAT DOES LIQUIDITY ALLOW AN INVESTOR¿ It allows the investor to have more fast transactions and short periods to receive sales from assets 7. US treasury is backed by the American government, so, theoretically, these securities are risk-free 8. Components include the cost of equity and debt after taxes, besides the capital structure 9. Increase leveraged increases the total amount of debt in the capital structure. Depending on the cost of new debt, the final wacc might decrease, because cost of debt is lower than the cost of equity 10. About the utility company, I would see the Cash flow statement at first. These kinds of company need heavy investments, and capex should be high. Cash flow statement would tell if the company is able to generate cash flow above capex 11.What industry do you follow¿