1.Although we often take modern security analysis for granted, the basic concept that a firm’s value could be determined by analyzing its income statement and balance sheet was not seriously advanced until about seventy years ago, when this approach was published by: A) John Burr Williams. B) William Sharp. C) Benjamin Graham and David Dodd. D) Harry Markowitz. The correct answer was C) The concept that a firm’s value could be discerned by analysis of its financial statements was first advanced in Security Analysis, published in 1934 by Benjamin Graham and David Dodd. 2.Which of the following models is credited to the work of John Burr Williams? A) Free cash flow to equity (FCFE). B) Free cash flow to the firm (FCFF). C) Cash flow return on investment (CFROI). D) Dividend discount model (DDM). The correct answer was D) John Burr Williams published The Theory of Investment Value in 1938, setting forth the theory that a value of a stock could be determined by discounting the value of future dividends. 3.Modern security analysis is built on the concept of: A) discounting future returns. B) constant growth of earnings and dividends. C) all profitable firms must pay dividends. D) speculation as a professional activity. The correct answer was A) The concept that the value of an investment is equal to the discounted value of future returns is attributed to the work of Graham and Dodd, and John Burr Williams. This concept forms the basis for modern security analysis. | 
发表于 2008-4-14 12:05
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