1.Which of the following would be a quantitative factor in asset valuation? A) Required return on corporate bonds has increased. B) The CFO has been indicted for fraud. C) Top management has turned over often in the last two years. D) The audit firm also is active in planning and consulting with the company. The correct answer was A) The change in the required return on corporate bonds is a quantitative factor that the analyst can incorporate in the valuation model. Each of the other factors listed is a qualitative factor which may undermine the analyst’s confidence in the valuation. 2.The fact that the CEO has hired his wife as CFO could be what type of factor in the asset valuation analysis? A) A qualitative factor. B) A quantitative factor. C) An internal factor. D) An external factor. The correct answer was A) The close personal relationship between the CEO and CFO may be a qualitative factor affecting the analyst’s confidence in the valuation. 3.Which of the following would be a qualitative factor in asset valuation? A) Earnings are down 4% in a quiet market. B) The new CEO has a reputation for financial gimmickry. C) New union contracts result in lower expected net income. D) The Food and Drug Administration has rejected the firm's new patent application. The correct answer was B) Each of the other factors is quantitative in that the analyst can alter the expectations used in the valuation process. Lack of confidence in the inputs, evidenced by the CEO’s reputation, is a qualitative issue that can be expected to lessen the confidence that the analyst has in the valuation. | 
发表于 2008-4-14 12:24
| 
