| Read 'Chapter 1: Corporate Valuations' & answer the following question(s): |
| 1. | There are many reasons for determining the value of a company. The reasons for a valuation do NOT include: |
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| 2. | Tough economic times and economies of scale encourage all the following EXCEPT |
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| 3. | The estimated rate of capitalization (cost of capital) includes |
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| 4. | For the dissolution of the business, the company's value might be based on the ___________________ of the company's assets. |
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| 5. | Business valuation methods do NOT include |
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| 6. | The discount rate ordinarily used in present value calculations is the |
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| 7. | The present value of $110,000 expected to be received one year from today at an interest rate (discount rate) of 10% per year is: (Note: the present value of $1 at 10% for one period is 0.909). |
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| 8. | A business is worth the discounted value of future cash earnings plus the discounted value of the expected selling price. Which of the following used this concept? |
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| 9. | "Earnings surprises” are defined as |
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| 10. | __________________ is NOT an approach to determining the fundamental value for a security investment. |
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| Read 'Chapter 2: Security and Real Estate Valuation' & answer the following question(s): |
| 11. | The valuation process for a bond does NOT require knowledge of |
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| 12. | Which of the following is directly applied in determining the value of a stock when using the Gordon’s valuation model? |
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| 13. | Consider a common stock that paid a $3 dividend per share at the end of the last year and is expected to pay a cash dividend every year at a growth rate of 10 percent. Assume the investor's required rate of return is 12 percent. The value of the stock would be |
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| 14. | A beta of “0” means |
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| 15. | Price-earnings ratio is NOT affected by |
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| 16. | The capitalization of earnings method is based on the _______________ assumption. |
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| 17. | A measure of a security's volatility relative to an average security is |
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| 18. | Forecasted price at the end of year is |
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| 19. | Assume that required rate of return stay the same but that the future dividends are expected to grow over the long run. As a result of the growth in dividends, the company’s stock price should |
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| 20. | The market value of a firm’s outstanding common shares will be higher if |
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| 21. | By using the dividend growth model, estimate the value of the stock for a firm with a required rate of 20%, an estimated dividend at the end of the first year of $3.00 per share, and an expected growth rate of 10%. |
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| 22. | The difference between the required rate of return on a given risky investment and that on a riskless investment with the same expected return is the |
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| 23. | ______________________ is NOT considered a pragmatic approach to common stock valuation. |
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| 24. | The market portfolio, such as Standard & Poor’s 500, has a beta of ____. |
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| 25. | The ___________________________ method uses the present value technique under which the asking price or value of a real estate investment is the present worth of the future after-tax cash flows from the investment, discounted at the rate of return required by the investor. |
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| 26. | _________________ is NOT a rule-of-thumb method to arrive at the estimated value of an income producing property. |
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| 27. | Certain terms used in real estate investments have applications similar to those used in security analysis. For example, the price earnings (P/E) ratio found in the analysis of stocks is equivalent to _____________ in real estate investment analysis. |
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| 28. | Which of the following is equal to before-tax cash flow from operations? |
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| 29. | Calculate the capitalization rate for the following investment: Net operating income (NOI) = $18,750; Purchase price = $150,000; Equity = 20% |
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| 30. | The capitalization rate is |
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