Reference no: EM132784252

True or False

Question 1: Uncertainty is captured in valuation models through cost of capital or discount rate

Question 2: Valuation is the estimation of an asset's value based on variables perceived be related to future investment returns, on comparisons with similar assets, or, when relevant, on estimates of immediate liquidation proceeds

Question 3: Definition of value may vary depending on the context Different definitions of value include intrinsic value, going concem value, liquidation value and fair market value

Question 4: Valuation plays significant role in the business world with respect to portfolio management, business transactions or deals, corporate finance, legal and tax purposes

Question 5: Generally valuation process involves these five steps understanding of the business, forecasting financial performance, selecting right valuation model, preparing valuation model based on forecasts and applying conclusions and providing recommendations

Question 6: Value is defined at a specific point in time

Question 7: Value varies based on ability of business to generate future cash flows

Question 8: Market dictates appropriate rate of return for investors

Question 9: Value is influenced by transferability of future cash flows

Question 10: Value is impact by liquidity