1. 11. Continuing free cash flows represent

the free cash flows after the point at which the firm has settled into a long-run steady-state growth rate.

2. 12. Steady-state growth in free cash flows could be driven by long-run expectations for growth attributable to

general economic productivity

3. 13. Financial assets include all of the following except

intangible assets

4. 14. Financial liabilities include all of the following except

accrued taxes

5. 17. All of the following are logical steps that enable the analyst to determine reliable estimates of value except:

derive a single point estimate of value for a share's current price

6. 18. Free cash flow is calculated as net cash provided by operating activities less

capital expenditures and dividends.

7. 21. If a firm's stock returns covary identically with returns to a marketwide portfolio, then its market beta from such a regression is:

equal to one

8. 22. Nonsystematic risk factors would include all of the following except:

unemployment levels

9. 23. An equity security with systematic risk equal to the average amount of systematic risk of all equity securities in the market

1. should expect to earn the same rate of return as the average stock in the market portfolio.
2. has a market beta equal to one.

10. 1. Free cash flows for common equity shareholders are the cash flows specifically available to the common shareholders after making all capital expenditures, _____________________________________________ and ____________________________________________________________.

ANS: debt service payments to lenders, paying dividends to preferred shareholders