Which of the following statement is correct? O Liquidation value is a best-case valuation assessment because a company's net income and revenues should be worth at least the amount generated per share at liquidation. OAP/E ratio of 20 means that investors are willing to pay $1 for $20 of a stock's earnings. O When the YTM rises, the market price of a bond falls. The discount rate used in the DCF model is the treasury-bill rate, which is a function of the riskless return of the investment. All the answers are incorrect. Which of the following statement is correct? O When the YTM is equal to the coupon rate, the bond sells at a premium over face value. O Cash flows from a bond with a positive coupon rate consist of periodic interest payments and the face value payment at maturity. O All the answers are incorrect. 4 O Cash flows for a bond consist of dividend payments and the price received for the eventual sale of the sharE. OA bond's market price depends on its yield to maturity and when the YTM is greater than the coupon rate, the bond sells at a premium over face value. Et Which of the following statement is correct? O The value of any security is the present value of its future cash payments. O Three factors; size of cash flows, timing of cash flows, and risk associated with the cash flows do not affect future earnings of a firm. O All the answers are incorrect. O Preferred stock is valued as an annuity. O To value bonds, we adapt the discounted cash flow model to reflect that a bond's dividends are a perpetuity