In the formula FCF = Sales Revenues-Operating Costs-Operating Taxes-Required Investments in New Operating Capital, 9. Fundamental Company Funds Free Cash Flows a. b. c. Free Corporate Fund 10. The intrinsic, or fundamental, price of a corporation's stock is a function of a. b. c. Expected cash flows of the corporation The market price of the stock The expected payment of dividends on the corporation's stock 11. The stock price that we observe in the financial markets is the: a. Fundamental price b. Intrinsic price c. Market price 12. If the market price of a stock reflects all the relevant information about the expected cash flows of a corporation, then: a. b. c. The market price of the stock is equal to the intrinsic price of the stock The fundamental price of the stock is greater than the intrinsic price of the stock The market price of the stock is equal to the market rate premium 13. Since perfect information on all corporations is not available to everyone in the market for stocks, the market price of a stock can deviate from its: a. Rate of return b. Market rate premium c. Intrinsic price 14. When we say that the objective of the corporation is to create value for their investors, we really mean it is to: a. b. c. Create as many shares of stock as possible Maximize the fundamental price of the corporation's common stock Maximize the market price of the corporation's common stock 15. The time value of money refers to the fact that: a. b. c. Dollars paid or received at two different points in time are different Old currency needs to be taken out of circulation A dollar today is worth less than a dollar in the future