Hello tutors please help me with this assignment.

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1. Which of these two methods is better: discounting the Equity Cash Flow or

discounting the Free Cash Flow?

2. Is it possible to value companies by calculating the present value of the EVA

(Economic Value Added)? Which are the necessary hypotheses so that such valuations

provide similar results to discounting cash flows?

3. At times, companies accuse investors of performing credit sales that they make their

quotations fall. Is that true?

4. What impact does high inflation have on the value of a business?

30. Is it possible to use different WACCs in order to discount each year's flows? In which

cases?

5. Is it correct to use in the valuation of the shares of a company the "value of the real

net assets" which, according to the Institute of Accounting and Auditing (ICAC),

represents the "book value of shareholder's equity, corrected by increases or

decreasing in value which could be demonstrated, in the case of the goods, rights and

obligations of the company at the reference date?"

6. Is it correct to say that the value of the shares is the "value of the results'

capitalization" which, according to the Institute of Accounting and Auditing (ICAC)

represents "the sum of the expected future results of the company during a certain

period, discounted at the moment of the valuation?"

7. Is it true that a company creates value for its shareholders during a year if it

distributes dividends or if the quotation of the shares increases?

8. The ROE (Return on Equity) is the ratio between net income and Shareholders' equity. Is it correct?

9. The meaning of ROE is return to shareholders. Consequently, is ROE a correct

measurement of the return to shareholders?

6 - IESE Business School-University of Navarra

10. Regarding the WACC that has to be applied to a project, should it be an expected

return, an opportunity cost or the average historical return on similar projects?