Reading 34: The Equity Valuation Process- LOS c～ Q1-3 reported, valuation, important, security

wzaina

 

LOS c: Discuss the importance of quality of inputs in valuation.

Q1. When using a firm’s reported financial information as inputs into a security valuation model, it is important for the analyst to have confidence that the reported information accurately reflects the operations of the firm. This concern is referred to as:

A)   a confidence factor.

B)   the transparency of earnings.

C)   the quality of earnings.

 

Q2. Overestimating the growth rate of a firm in using a valuation model would result in a value that is likely to be:

A)   too high.

B)   can't tell from this information.

C)   too low.

 

Q3. Which of the following would cause an analyst to have concern about a firm’s quality of earnings?

A)   The gain on the sale of a plant was included in operating earnings.

B)   A firm books sales when orders are shipped.

C)   The firm took a write off for a recently impaired asset.

danforth

dd

梅子绿茶

 aa

goodthingzxy

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annyyu

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gerryzhang

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gerryzhang

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vanisacarlton

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沙胖胖

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chengmcgill

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