In situations where a firm is not profitable, which of the following statements is correct?

Question 1 options:

	a) PE ratios are an excellent pricing metric
	b) It is impossible to reconcile the difference.
	c) It is not possible to use any earning ratios such as PE or EV/EBITDA.
	d) None of the above.

Assume that your analysis of a firm results in a DCF price of $10.00 per share and RV price per share of $8.00.

Question 2 options:

	a) This can never happen because the DCF price must always equal the RV price.
	b) It is impossible to reconcile the difference.
	c) The difference is referred to as the "GAP" and must be reconciled to obtain a final price per share.
	d) None of the above.

In an M&A situation the Acquirer will:

Question 3 options:

	a) Never offer to buy the Target firm at a price per share higher than the price per share calculated by its DCF analysis.
	b) Always offer to buy the Target firm at a price per share higher than the price per share calculated by its DCF analysis.
	c) Always offer to buy the Target firm at a price per share equal to the firm's last trade.
	d) None of the above.

In an M&A situation an investor in the Target firm will:

Question 4 options:

	a) Want to sell their share at a price per share calculated by the Acquirer's DCF analysis.
	b) Want to sell their share at a price per share that will include a significant M&A premium over the current market price of the Target.
	c) Want to sell their share at a price equal to an industry comparable RV analysis.
	d) None of the above.