Calipes, Roelyn B.

B 192 Financial Analysis & Reporting

Learning Activity
Activity 1. True or False. Write True if the statement is true and False if
otherwise.
TRUE 1. It refers to all tools and techniques used by investors to find out the
true value of a company’s equity.
TRUE 2. Equity valuation enables companies with sound business models to
command a premium in the market.
TRUE 3. Individual estimates of the effect of financial information do not
vary and as such different people may come up with different stock prices.
FALSE 4. The performance of every business is not influenced by the
performance of the economy in general as well as the industry in which it
operates.
TRUE 5. All the valuation models do not necessarily lead to the same
conclusion.
TRUE 6. The analyst has to give a buy, sell or hold recommendation based
on the current market price and what analysis shows is the intrinsic worth of
the company.
TRUE 7. Any investor must always have their own estimate of value of the
stock, which they derive from their very own equity valuation model.
TRUE 8. Equity valuation can be used as a tool to read the market.
FALSE 9. Market value only considers that value which can be derived from
incremental cash flows that will be produced by a firm.
TRUE 10. Investment value is the amount of money an investor would pay
for a property.