1. Are stock prices affected more by long-term or short-term performance? Explain.

2. Explain the market multiple method

3. What situation is ideally suited to valuation with the dividend growth model? Explain.

4. What are the advantages of the FCF valuation model relative to the dividend growth model and the market multiples model?

5. Which method is best suited to determine the value of a division or business unit that is part of a larger company? Explain.

6. Explain why preferred stock is considered a hybrid security. How is the value determined?