(GLOBAL EDITION) CHAPTER 13
QUESTIONS WITH CORRECT ANSWERS
2025-2026
book value - correct answer-the net worth of common equity according to a firm's balance sheet
liquidationAvalueA-AcorrectAanswer-
netAamountAthatAcanAbeArealizedAbyAsellingAtheAassetsAofAaAfiirmAandApayingAoffAtheAdebt
replacementAcostA-AcorrectAanswer-costAtoAreplaceAaAfirm'sAassets
Tobin'sAqA-PcorrectAanswer-ratioAofAmarketPvalueAofAtheAfirmAtoAreplacementAcost
intrinsicAvalueA-AcorrectAanswer-
theApresentAvalueAofAaAfirm'sAexpectedAfutureAnetAcashAflowsAdiscountedAbyAtheArequiresArateAofAreturn
marketAcapalizationArateA-AcorrectAanswer-
theAmarketAconsensusAestimateAofAtheAappropiateAdiscountArateAforAaAfirm'sAcashAflows
dividendAdiscountAmodelA(DDM)A-AcorrectAanswer-
aAformulaAforAtheAintrinsicAvalueAofAaAfirmAequalAtoAtheApresentAvalueAofAallAexpectedAfutureAdividends
constantAgrowthADDMA-AcorrectAanswer-
aAformAofAtheAdividendAdiscountAmodelAthatAassumesAdividendsAwillAgrowAatAaAconstantArate
dividendApayoutAratioA-PcorrectAanswer-percentageAofAearningsApaidAoutAasAdividends
plowbackAratioAorAearningsAretentionAratioA-AcorrectAanswer-
theAproportionsAofAtheAfirm'sAearningsAthatAisAreinvestedAinAtheAbusinessA(andAnotApaidAoutAasAdividends)