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1. Which of the following are not real options? a. The option to expand production if the product is successful b. The option to buy
1. Which of the following are not real options? a. The option to expand production if the product is successful b. The option to buy additional shares of stock if the stock price goes up c. The option to expand into a new geographic region d. The option to abandon a project e. The option to switch sources of fuel used in an industrial furnace 2. The price/sales ratio indicates: a. the amount of risk in the firm's operations b. what the market is willing to pay for a firm's revenues c. the price advantage a company has for its brand names d. what the analysts see as the breakup value of the firm e. None of the above 3. What is the best approach to assessing growth of the free cash flows to calculate the terminal value? a. GDP growth b. Zero growth c. A fading value d. No terminal value I e. It depends on the context
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