Limitations in applying the comparable companies’ method of valuation include which of the following?
A. Finding truly comparable companies is difficult
B. The use of market-based methods can result in significant under- or overvaluation during periods of declining or rising stock markets
C. Market-based methods can be manipulated easily, because the methods do not require a clear statement of assumptions with respect to risk, growth, or the timing or magnitude of future earnings and cash flows.
D. A, B, & C
E. A & B only
查看答案
In determining the purchase price for an acquisition target, which one of the following valuation methods does not require the addition of a purchase price premium?
A. Discounted cash flow method
B. Comparable companies’ method
Comparable industries’ method
D. Recent transactions’ method
E. A & B only
Which one of the following factors is not considered calculating a firm’s PEG ratio?
A. Projected growth rate of the value indicator (e.g., earnings)
B. Ratio of market price to value indicator (e.g., P/E)
C. Share exchange ratio
D. Historical growth rate of the value indicator
E. None of the above
The incremental cash flows of a merger can relate to which of the following:
A. Working capital
B. Profits
Capital spending
D. Income taxes
E. All of the above
When evaluating an acquisition, you should do which of the following:
A. Ignore market values of assets and focus on book value
B. Ignore the timing of when the cash flows will be received
C. Ignore acquisition fees and transaction costs
D. Apply the discount rate that is relevant to the incremental cash flows
E. Ignore potential losses of management talent
微信支付 
支付宝支付