In November 2006, Citigroup's stock (NYSE: C) was trading at $49.59. Following the credit crisis of 2007-2008 and by the end of October 2009, Citigroup's stock price had plummeted to $4.27. Several banks went under, and others saw their stock prices lose more than 60% of their value. Based on your understanding of stock prices and intrinsic values, which of the following statements is true? A stock's intrinsic value is based on true risk in the company. A stock's market price is based only on true investor returns. You can estimate the value of a company's stock using models such as the corporate valuation model and the dividend discount model. Which of the following companies would you choose to evaluate if you were using the corporate valuation model to estimate the value of the company's stock? O A company that has a stable distribution policy. O A company that is not expected to distribute any earnings to its stockholders for the next few years. People Which of the following describe the reason(s) why maximization of intrinsic stock value benefits society? Check all that apply. The owners of stock are society. Successful companies attract more talent. Workers prefer companies that minimize operating costs. Consumers benefit when companies rise prices beyond reasonable levels