INV3701 ASSIGNMENT 2
SEMESTER 2 - 2022
UNIQUE NUMBER: 733869
DUE DATE: 12 SEPTEMBER 2022
, Questions
1. Which one of the following statements is most likely correct?
1. Residual income is suitable for a firm that has positive free cash flow for the foreseeable
future.
2. The dividend discount model is suitable for a firm that has the perspective of a minority
shareholder.
3. Free cash flow models are suitable for firms that have a dividend payment history or have
a dividend payment history that is clearly and appropriately related to earnings.
2. The increase in fixed assets is defined as ...
1. Net income less capital expenditure.
2. Capital expenditure less depreciation.
3. Net income less depreciation less capital expenditure.
Increase in fixed assets = Capital expenditure – Depreciation
1
SEMESTER 2 - 2022
UNIQUE NUMBER: 733869
DUE DATE: 12 SEPTEMBER 2022
, Questions
1. Which one of the following statements is most likely correct?
1. Residual income is suitable for a firm that has positive free cash flow for the foreseeable
future.
2. The dividend discount model is suitable for a firm that has the perspective of a minority
shareholder.
3. Free cash flow models are suitable for firms that have a dividend payment history or have
a dividend payment history that is clearly and appropriately related to earnings.
2. The increase in fixed assets is defined as ...
1. Net income less capital expenditure.
2. Capital expenditure less depreciation.
3. Net income less depreciation less capital expenditure.
Increase in fixed assets = Capital expenditure – Depreciation
1
