Valuations recap

How did you find class test 1?

• Easy

• Fair

• Challenging but do-able

• Difficult

• Impossible

Valuation involves the judgement of a person

• True

• False

Which formula do we use to value a non-redeemable bond?

• FV of Perpetuity formula

• PV of Annuity Formula

• FV of Annuity Formula

• PV of Perpetuity formula

When calculating maintainable earnings, you should adjust for the following (choose all that apply)

• Non-cash items

• Non-recurring expenses

• Revenue increase from signed contract

• Once-off income

When performing an NAV calculation as a reasonability test, one uses the following approach. Select ALL that apply

• Book value of assets less book value of liabilities

• Fair value of assets less fair value of liabilities

• Book value of equity +/- fair value adjustments to assets and liabilities

• Fair value of equity

Value and price is same

• True

• False