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LOS l: Explain terminal value and discuss alternative approaches to determining the terminal value in a discounted dividend model.
Q1. The growth rate for a firm is forecast to be 8% for three years and 5% thereafter. If the required rate of return is 10%, and the dividend expected in year three is $4.67 per share, what will be the present value of the terminal value of the company?
A) $57.14.
B) $91.11.
C) $73.68.
Q2. As an alternative to using a dividend discount model to estimate the terminal value of a firm, many analysts prefer to use:
A) asset amortization schedules.
B) internal rates of return.
C) market multiples.
Q3. Multi-stage models determine the value of a firm as the sum of the value during the growth stage(s) and the firm’s:
A) market value.
B) transitional value.
C) terminal value. | 
发表于 2009-3-6 16:36
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