1.TrueFalseWhen performed correctly the discounted cash flow method and the economic profit model should arrive at the same enterprise value for the company.

2.TrueFalseIf the company is changing it capital structure it should use the economic profit model not the adjusted pre value model.

3.TrueFalseWhen using the discounted cash flow method, the analyst should discount the free cash flows to present using the weighted average cost of capital.

4.TrueFalseWe analyze the historical financial performance (or past) to understand how the company has created value and to identify trends so that we have a more informed forecast of future cash flows?

5.TrueFalseMost discounted cash flow models for companies have three stages an explicit forecasting period, followed by a slowdown period, and then an additional continuing value period.

6.TrueFalseExcess marketable securities are a form of non-operating asset that should be added to the present value of future free cash flows to advance towards enterprise value?

7.TrueFalseDebt and under-funded pensions are two non-equity claims discussed in the chapter?

8.TrueFalse To calculate NOPLAT and Invested Capital we must first reorganize the financial statements.

9.TrueFalseNon-consolidated subsidiaries are non-equity claims and must be valued and subtracted from enterprise value.

10.TrueFalseUsing the Enterprise Discounted Cash Flow Model, the future free cash flows should be discounted to present using the cost of debt (not the weighted average cost of capital) to arrive at the present value of free cash flows.

11.ROIC is calculated by dividing what two numbers (be specific)?

12.What is net operating working capital?

13.Why do we net (or back out) the accounts payable and accrued expenses in arriving at net working capital and then invested capital?

14.How do you calculate free cash flow?

Do the authors suggest using the operating tax rate or statutory tax rate in modeling the reorganized statements?