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LOS a: Define valuation and discuss the uses of valuation models.
Q1. A wise analyst will examine a valuation to determine:
A) ways to enhance a client's valuation.
B) how well it will be received by the firm's management.
C) its sensitivity to changes in expectations.
Q2. The goal of asset valuation, based on the expected future cash flows of an asset, is to establish an asset’s:
A) relative value.
B) intrinsic value.
C) market value.
Q3. Which of the following is NOT a use of asset valuation?
A) Projecting the value of corporate actions.
B) Issuing fairness opinions.
C) Estimating inflation rates.
Q4. Valuation models for equities contain estimates of required returns and:
A) an assumed continuation of past cash flows.
B) known future cash flows.
C) expected future cash flows.
Q5. Minority shareholders often do not have control of the price at which the firm will be sold or merged with another firm. In order to safeguard their interests, minority shareholders will often seek an analyst’s opinion of the value of the firm. This opinion is referred to as a:
A) fairness opinion.
B) second opinion.
C) minority opinion.
Q6. How can we account for different valuations for the same firm from several analysts even if they use the same required returns?
A) The analysts may be biased with personal opinions about management.
B) Valuations are based on the analyst's expectations.
C) Valuation models contain random errors. | 
发表于 2009-3-5 09:21
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