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Unit 1 : Homework Problems 1 - 1 What is a firm's intrinsic value? Its current stock price? Is the stock's true long - run

Unit 1: Homework Problems
1-1
What is a firm's intrinsic value? Its current stock price? Is the stock's "true" long-run value more closely related to its intrinsic value or to its current price?
1-2
in equilibrium?
When is a stock said to be in equilibrium? Why might a stock at any point in time not be
1-4
Is it better for a firm's actual stock price in the market to be under, over, or equal to its intrinsic value? Would your answer be the same from the standpoints of stockholders in general and a CEO who is about to exercise a million dollars in options and then retire?
Explain.
1-6
What are the various forms of business organization? What are the advantages and disadvantages of each?
1-7
Should stockholder wealth maximization be thought of as a long-term or a short-term goal? For example, if one action increases a firm's stock price from a current level of $20
to $25 in 6 months and then to $30 in 5 years, but another action keeps the stock at $20 for several years but then increases it to $40 in 5 years, which action would be better?
Think of some specific corporate actions that have these general tendencies.
2-1
How does a cost-efficient capital market help reduce the prices of goods and services?

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