Which of the following statement is incorrect? O Most of the answers are correct. O When analysts value the current liability component of a complete business, they normally do not just read the value of the current liabilities from the firm's balance sheet because the market value of current liabilities is most often not equal to their book value. O The book value or net worth of a firm can be found by subtracting the value of the firm's liabilities and preferred stock, if any, as recorded on the balance sheet from the value of its assets. Le O Financial managers determine the value of a business, a business asset, or an interest in a business by finding the present value of the future cash flows that the owner of the business, asset, or interest could expect to receive. O A bond's market price depends on its yield to maturity and when the YTM is less than the coupon rate, the bond sells at a premium over face value. Which of the following statement is incorrect? O The yield on preferred stock represents the annual rate of return that investors realize if they buy the stock for the current market price and then receive the promised dividend payments on time. O Most of the answers are correct. O The market value of preferred stock is the present value of the stream of preferred stock dividends, discounted at the markel required rate of return for that investment. O Analysts calculate an appropriate stock price for firms in the industry by multiplying each firm's earnings per share (EPS) by the industry average P/E ratio. O To value businesses, assets, and securities, investors and financial managers use a general valuation model to calculate the future value of the historical net income values and that model unfortunately does not incorporate risk and return, and time value of money concepts. Which of the following statement is incorrect? O The general pattern of cash flows from a bond with a positive coupon rate are the coupon interest payments at regular intervals throughout the life of the bond and the face value payment on the maturity date. O Most of the answers are correct. O Cash payments from preferred stock dividends are scheduled to continue forever. A bond's market price depends on its yield to maturity and when the YTM is equal to the coupon rate, the market price equals the face value. To value businesses, assets, and securities, investors and financial managers use a general valuation model to calculate the future value of the historical net income values and that model unfortunately does not incorporate risk and return, and time value of money concepts