1. Value is affected by a. Existing cash flows, growth in cash flows and quality of growth b. Existing growth rate, future, and quality of growth c. Existing growth rate, future, and quantity of growth d. Existing growth rate, future growth, and quantity of growth 2. Volatility is a. a deviation pf past EPS changes measured at regular basis b. a deviation of past dividend changes measured at regular basis c. a deviation of past profit changes measured at regular basis d. a deviation of past price changes measured at regular intervals 3. A higher degree of competition among firms: a. pushes prices towards the marginal cost of production b. allows companies to earn maximum profits c. makes customers non-sensitive to brands d. increases bargaining power of companies 4. You are valuing two companies. Company A is a mature company, with a long and stable history. Company B is a young, start-up with substantial uncertainty about future and little history. Which of the following statements would you subscribe to? a. I will be able to value company A less precisely than company

B, and there will be a bigger payoff to valuing Company B.

b. I will be able to value company A more precisely than company

B, and there will be a bigger payoff to valuing Company A.

c. I will be able to value company A less precisely than company

B, and there will be a bigger payoff to valuing Company A.

d. I will be able to value company A more precisely than company

B, and there will be a bigger payoff to valuing Company B.

5. To access the efficiency of a firms operating management, an

analyst would analyst the firms

a. net profit margin

b. operating asset turnover

c. cash ratio

d. net financial leverage