Fundamentals of Financial Management, Third Edition

Mark true or false.
1. The concept of intrinsic value is synonymous with the concept of book value.
2. Goodwill forms a part of the liquidation value.
3. The book value of an asset is equal to its original cost plus depreciation.
4. If the coupon rate of a bond is lower than the discount rate, its market value will be higher than its par value.
5. The larger the duration, the greater will be the rate of fall in the price of a bond with a given percentage of change in the interest rate.
6. The value of a share is equal to the present value of its expected future dividend.
Choose the most suitable answer.
1. Intrinsic value of a firm depends upon:
  1. present value of its future earnings
  2. cost of its assets minus depreciation
  3. none of the above ...

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