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Valuation Exam 1 2024/2025 Questions With Completed & Verified Solutions.
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Valuation Exam 1 2024/2025 Questions With Completed & Verified Solutions.
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Valuation Exam 1Which one of the following actions would help a company create long-term value?
Focus on keeping costs at a minimum.
Find the optimal debt-to-equity ratio.
Seek and exploit new sources of competitive advantage
Monitor and follow macroeconomic trends - ANS Seek and exploit new sources of competitive
advantage
What can increase a stock price? - ANS - Announcing a new initiative - all based on perceived
information
- Improving financial health can have an impact but not if done behind closed doors
Under which condition will a fast-growing firm create value?
A It will create value in any circumstance
B If the return on invested capital (ROIC) is greater than the cost of obtaining funds
C If the return on invested capital (ROIC) is less than the cost of obtaining funds
D If the firm increases market share. - ANS B If the return on invested capital (ROIC) is greater
than the cost of obtaining funds
Which of the following was most responsible for the Internet boom and bust?
A The Y2K bug
B Increased foreign competition
C A misapplication of the principle of leverage
D A single-minded focus on growth at any cost - ANS D A single-minded focus on growth at any
cost
Which of the following is one of the factors for Ferrari Spin-off? - ANS Transfer FCA liabilities to
Ferrai
problems with shareholder wealth maximization - ANS wrong assumptions
speculation
different objectives
fair treatment to all social groups
corporate finance - ANS M&A
Valuation & Fairness opinion
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