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LOS b: Discuss the uses of residual income models.
Q1. Which of the following is the most appropriate tool to measure managerial effectiveness, goodwill impairment, and equity value?
A) Gordon growth model.
B) Free cash flow to the firm.
C) Residual income.
Q2. A residual income model would be least appropriate as a tool to measure which of the following?
A) Economic income.
B) Operating leverage.
C) Goodwill impairment.
Q3. The residual income approach is appropriate when:
A) a firm does not pay dividends or the payments are too volatile to be sufficiently predictable.
B) a firm pays high dividends that are quite stable.
C) the clean surplus accounting relation is violated significantly. | 
发表于 2009-3-9 17:52
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