Which the accounting measure of a firm equity value

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Problem 1: Which of the following is NOT an advantage of relative valuation as compared to discounted cash flow valuation?

a. Relative valuation is unaffected by assumptions such as growth and ROE

b. Relative valuation can be used even when cash flows are negative

c. Relative valuation will incorporate current market perceptions

d. Relative valuation will always identify at least some securities as under and over- valued relative to each other.

Problem 2: The accounting measure of a firm's equity value generated by applying accounting principles to asset and liability acquisitions is called:

a. book value

b. market value

c. liquidation value

d. sales price

Reference no: EM132940611

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