1) For a particular stock, the required return can be determined by:

a.

multiplying the equity risk premium times the risk-free rate.

b.

multiplying an appropriate beta times the equity risk premium and adding a risk-free rate.

c.

multiplying an appropriate beta times the equity risk premium and subtracting the risk-free rate

2)

Susan Weiber, CFA, has noted that even her best estimates of a stock's intrinsic value can differ significantly from the current market price. The least likely explanation is:

a.

differences between her estimate and the actual intrinsic value.

b.

differences between the intrinsic value and the going concern value.

c.

differences between the actual intrinsic value and the market price.

3)

An appropriate valuation approach for a company that is going out of business would be to calculate its:

a.

liquidation value.

b.

dividend discount model value.

c.

residual income value