1. Which of the following valuation models uses the weighted average cost of capital (WACC) as the discount rate? (Please circle only one answer)

1. Residual earnings model
2. Dividend discount model
3. Discounted cash flow model
4. Asset based valuation model
5. None of the above valuation models uses the WACC as the discount rate

2. Which of the following applications would not be appropriate for the comparables approach to valuing a firm? (Please circle only one answer)

1. Calculating liquidation values
2. Initial public offerings
3. Valuing private firms to approximate price
4. Litigation for loss of value
5. All of the above are appropriate applications of the comparables approach

3. Which of the following is not a problem with using the asset-based valuation approach? (Please circle only one answer)

A. Valuing operating assets when there is no market for them

B. Identifying value in use for a particular firm

C. Valuing intangible assets

D. Valuing synergies of assets being used together

E. All of the above are problems with the asset based approach