QUESTION 2 W A firm wants to strengthen its financial position. Which of the following actions would increase its quick ratio? Speed up the collection of receivables and use the cash generated to increase inventories. Issue new common stock and use the proceeds to acquire additional fi xed assets. O Offer price reductions along with generous credit terms that would (1) enable the firm to sell some of its excess inventory and (2) lead to an increase in accounts receivable. Issue new common stock and use the proceeds to increase inventories. QUESTION 3 Which of the following is NOT correct? The free cash flow valuation model can be used to find the value of a division. The free cash flow valuation model can be used both for companies that pay dividends and those that do not pay dividends. Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon, or terminal, value. The free cash flow valuation model must discount free cash flows by the required return on equity