The cost of equity can be determined using CAPM. Which of the following is incorrect?

Question 3 options:

A)	The risk free rate is typically based on a 3-day treasury bill.

B)	The higher the beta, the higher the cost of equity.

C)	Using CAPM, the cost of equity is equal to the risk free rate + (B X Market Risk Premium).

D)	The market risk premium is the risk of investing in equities.

Which of the following is a correct statement?

Question 4 options:

A)	All debt are liabilities.

B)	Accrued expenses are non-operating liabilities.

C)	All liabilities are debt.

D)	Accounts payable and short-term notes payable are non-operating liabilities.

Why is debt risky?

Question 9 options:

A)	Owners are satisfied before creditors in the case of bankruptcy.

B)	Debt carries a fixed commitment in the form of interest charges and principal repayment.

C)	Debt is not risky.

D)	Debt is an off-balance sheet item.

A company has Terminal Year Unlevered Free Cash Flow of $100. You expect this cash flow to grow at 2% in perpetuity, and the company's WACC is 14%. Using the Perpetual Growth Method, what is this company's Terminal Value?

Question 20 options:

A)

$ 867

B)

$ 833

C)

$ 729

D)

$ 850

Which of the following is incorrect?

Question 30 options:

A)	DCF is also referred to as the "perpetuity" or intrinsic model.

B)	The two stage framework for valuation is derived from the fundamental analysis of the company's cash flow generation potential.

C)	Multiples are also referred to as "Comps" or relative valuation models.

D)	For the model results to be correct, both the DCF and the Multiples results must be equal.