<<12345678910111213141516171819202122232425262728293031323334353637383940>> 1. What are examples of intangible assets?Land and buildingsPatents and trademarksMachinery and equipmentRaw materialsQuestion 1 of 40 2. Which of the following is considered a component of goodwill?Tangible assetsCustomer relationshipsCash reservesPhysical inventoryQuestion 2 of 40 3. Brand recognition contributes to a company's success by:Generating direct cash flowIndirectly impacting market positionEliminating the need for advertisingReducing customer loyaltyQuestion 3 of 40 4. Software that a company develops internally is categorized as:Tangible assetsFinancial assetsIntangible assetsPhysical assetsQuestion 4 of 40 5. Franchises are examples of intangible assets that generate cash flow through:Product manufacturingLicensing agreementsEmployee salariesGovernment subsidiesQuestion 5 of 40 6. Which of the following is a non-cash flow generating intangible asset?Brand recognitionCustomer relationshipsPatentsSoftware licensesQuestion 6 of 40 7. Contracts and agreements can be considered intangible assets when they are:Non-exclusiveInactiveExclusiveGovernment-regulatedQuestion 7 of 40 8. The relative valuation approach compares companies with and without a specific intangible asset to:Identify the asset's historical costDetermine the market value of the assetAssess the potential for goodwillUnderstand the impact of the asset on market valueQuestion 8 of 40 9. Which valuation approach involves forecasting incremental cash flows an asset brings to a company?Capital investment approachRelative valuationDiscounted cash flow valuationRisk and return modelsQuestion 9 of 40 10. Why might the capital investment approach not reflect the true market value of an asset?It ignores historical investmentsIt considers only short-term cash flowsIt fails to account for future earningsIt may not consider factors impacting the market's perceptionQuestion 10 of 40 11. How do real estate investments differ from certain financial assets like stocks?Real estate investments have infinite lifespansFinancial assets depreciate with useReal estate lacks liquidity compared to stocksFinancial assets are regulated by the governmentQuestion 11 of 40 12. Terminal value in stocks is typically higher due to:Anticipated cash flow growth continuing indefinitelyDepreciation being factored into current valueLower risk associated with stocksFixed dividends over timeQuestion 12 of 40 13. Why might a building's terminal value be less than its current value?Anticipated increase in property taxesPotential depreciationHigher demand for real estateRenovation plansQuestion 13 of 40 14. How do risk and return models apply differently to financial assets and real estate?They are regulated by distinct governmental bodiesReal estate has higher liquidityReal estate has limited lifespan impacting valuationTraditional models might not fully apply to real estate due to market and investor differencesQuestion 14 of 40 15. Valuing start-up firms using innovative technology is challenging due to:A surplus of historical dataHigh levels of tangible goods/servicesLimited history and lack of tangible goods/servicesPredictable market behaviorsQuestion 15 of 40 16. What helps assess the cyclicality, growth, and risk of emerging businesses?Earnings and price historyCapital reservesMarket saturationEconomic forecastsQuestion 16 of 40 17. What do newer firms face that creates difficulty in evaluation?Competition for evaluationLimited historical data and disclosuresExcessive financial statementsEstablished customer relationshipsQuestion 17 of 40 18. Which step in the valuation of start-up firms involves predicting operating margin when growth stabilizes?Estimating reinvestment for growthAssessing current standingRevenue growth estimationStable-growth associated operating margin estimationQuestion 18 of 40 19. Cash flows might be negative in early years for start-ups but hold the bulk of the total value, particularly in the:Initial yearsIntermediate yearsLater yearsTerminal yearsQuestion 19 of 40 20. What determines equity value per share in the valuation of start-up firms?Estimating beta and cost of debtDiscount rates and reinvestment estimatesDeducting non-equity claims from equity valueCash flow assessment in early yearsQuestion 20 of 40 21. What are reasons for negative earnings in firms?Cyclical market trendsFinancial overleverageProduct recallsShort-term issuesQuestion 21 of 40 22. Valuing low-earning firms due to specific events involves estimating earnings before those costs and:Minimizing tax benefitsIgnoring transitory lossesEvaluating long-term systemic issuesEnsuring permanent market share lossQuestion 22 of 40 23. Companies facing losses due to strategic errors may experience:Permanent market share gainsLong-term profitabilityReduced profitability or permanent market share lossIncreased competitionQuestion 23 of 40 24. Adjustments for cyclical firms' erratic earnings might involve:Averaging earnings over previous periodsScaling based on return on investmentEstimating growth rates during economic downturnsPredicting cyclicality in financial marketsQuestion 24 of 40 25. What is a unique characteristic of financial service companies concerning income estimation?Low regulatory constraintsSimplicity in reinvestment measurementDifficulty in estimating income due to provisioning for lossesMinimal reliance on government directivesQuestion 25 of 40 26. Why do financial firms often exhibit higher dividend payouts?Higher net capital expendituresReliance on government subsidiesLower historical dividend reliabilityLower net capital expenditures and historical dividend reliabilityQuestion 26 of 40 27. How do debt utilization and regulatory constraints impact financial service companies?They limit cash flow generationThey influence capital adequacy normsThey reduce income estimation challengesThey increase complexity in reinvestment measurementQuestion 27 of 40 28. What heavily impacts the estimation of the cost of equity for financial service companies?Market volatilityRegulatory impacts and capital structuresHistorical dividend reliabilityAsset liquidityQuestion 28 of 40 29. What influences the difficulty in measuring reinvestment in financial service companies?Technological advancementsGovernment directivesMarket competitionRegulatory constraintsQuestion 29 of 40 30. How do financial service firms use debt to generate income?By investing in tangible assetsBy minimizing regulatory impactsBy leveraging capitalBy increasing dividendsQuestion 30 of 40 31. What does the Dividend Discount Model (DDM) calculate?Expected growth ratesPresent value of expected dividendsTerminal value of equityExpected reinvestment ratesQuestion 31 of 40 32. How does DDM handle extraordinary growth periods?It assumes constant growth in dividends foreverIt incorporates varying growth rates over timeIt disregards extraordinary growth periodsIt eliminates dividends during growth periodsQuestion 32 of 40 33. Why might financial service companies exhibit higher dividend payouts in DDM?Due to higher expected growth ratesBecause of higher asset liquidityAttributed to lower net capital expenditures and historical dividend reliabilityTo offset regulatory impacts on capital structuresQuestion 33 of 40 34. What do valuation insights provide regarding non-operating assets like cash holdings?Methods for speculative investmentsDifficulties and common mistakes during evaluationGuidelines for long-term investment planningGovernment directives for asset managementQuestion 34 of 40 35. How do different valuation methods treat cash assets?Consistently across all valuation methodsVaried treatment due to differences in earning potentialsWith depreciation as a common factorWithout consideration for reinvestmentQuestion 35 of 40 36. Why might businesses hold cash as a non-operating asset?To speculate on commodity pricesTo avoid regulatory constraintsFor transactional purposes and protection against unplanned expensesTo increase dividend payoutsQuestion 36 of 40 37. What is the relationship between convertible debt and preferred stock with enterprise value?Convertible debt reduces enterprise valuePreferred stock increases enterprise valueThey have no impact on enterprise valueBoth increase enterprise valueQuestion 37 of 40 38. How might economic cycles impact the valuation of cyclical firms?Reducing earnings volatilityCreating predictable growth patternsInfluencing growth rates due to fluctuations in earningsMinimizing the need for normalizationQuestion 38 of 40 39. What does the valuation of e-commerce firms consider?Fixed technological advancementsStable consumer habitsRegulatory impacts on competitionConstantly evolving technology and its impact on the businessQuestion 39 of 40 40. How might holding companies be evaluated?Solely based on free cash flowConsidering potential investment opportunities and strategic decisionsIgnoring strategic decisions for evaluationWithout any considerations for potential investmentsQuestion 40 of 40 Loading...