Inventory turnover is a liquidity ratio. An increase in account receivables will increase a company's current ratio. A high current ratio always means that a company is efficiently utilizing its current assets. You are able to buy a stock at S14 where as its intrinsic value (or fair value) is S14.01. You have indeed bought this stock at a bargain price. Company ABC is expected to pay a dividend of SI .00 per year forever. You should be willing to pay up to $5 to buy a share of this company if your required return is 20%. A company is expected to pay a dividend of S2/share at the end of year 1 and no dividends thereafter. You will be willing to pay up to $1.81 for one share if your required return is 10%. You will write (sell) a call option if you are confident that the stock will not go up and unsure whether it will fall. You arc writing (selling) a put option on underlying British Pounds. It means that you are taking a long position. Under constant growth DCF model growth rate can exceed the required return. Writing (shorting) put option on an underlying index limits your profit to premium received, but the risk increases as stock rises