1)Conceptually, firms with P/E ratios less than their projected growth rates may be considered undervalued; while those with P/E ratios greater than their projected growth rates may be viewed as overvalued.

True

False

2)Key value drivers used in the assumption worksheet of most financial models include items that are highly correlated with operating cash flows and in turn firm value.

True

False

3)The weights used to calculate the weighted average cost of capital for a firm that has only common equity and debt represent the book value of equity and debt.

True

False