In mid-1982, Indiana Grocery operated 28 supermarkets in the Indianapolis area. In 1983, it sold about 13 percent of the area's groceries. Preston-Safeway in 1983 operated 12 supermarkets in the Indianapolis area and its share of area grocery sales was about 10 percent. In 1985, the owners of Indiana Grocery acquired the common stock of Preston-Safeway, which by then had already acquired additional stores from another supermarket chain that was leaving the Indianapolis area and had sold some stores to Indiana Grocery. Since 1986, all of Indiana Grocery's stores in Indianapolis have operated under the Preston-Safeway name. For simplification, we will hereinafter refer to both plaintiff-appellants as "Indiana Grocery."

1. The so-called "cash flow" (net income plus depreciation) is a flow of cash, but is it a

flow to the shareholders or to the company?

2. The dividend is the part of the net income that the company distributes to

shareholders. As the dividend represents real money, the net income is also real

money. Is that true?

3. The part of the net income that is not distributed to shareholders goes to reserves

(shareholders' equity). As dividends represent real money, reserves are also real

money. Is that true?

4. Does the shareholders' equity represent the savings a company has accumulated

through the years?3

5. Is book value the best proxy to the value of the shares

6. How could we obtain an indisputable discount rate? How should we calculate the beta

and the risk premium?

7. My company paid an extremely high price for the acquisition of another company; the

price was recommended by the valuation of an investment bank. We now have

financial problems. Is there any way to make that bank legally responsible for this

situation?13

8. Which currency has to be used in an international acquisition in order to calculate the

flows?

9. Calculated betas provide different information if they are obtained by using daily,

weekly or monthly data. Which data is the most appropriate?

10. Does is make any sense to calculate betas against local indexes when a company has a

great part of its operations outside this local market? I have two examples: BBVA and

Santander.