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  3. 1- the value of a security: (a) is equal to its fu

1- The value of a security: (A) Is equal to its fundamental price. (B) Is...

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Finance

1- The value of a security:

(A) Is equal to its fundamental price.

(B) Is determined by buyers and sellers in the market.

(C)Is determined by the future cash flows of the security.

(D) Is always equal to its price.

2- It is difficult to estimate specific values for residual income more than a few years into the future. To estimate residual income beyond a few years, we may use the DVM to calculate:

(A) The continuing value.

(B)The growth rate.

(C) The book value.

(D) The required return.

3- Normal earnings equals:

(A) Residual earnings

(B) Common stock equity times return on equity

(C) Return on equity minus required return

(D) Common stock equity times required return

4- You will receive a single payment of $3,500

6 years from now. What is the present value if the discount rate is 13.4%?

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