Which of the following item is not used in equity-based valuation models? Select one: a. Working capital b. Dividends c. Earnings d. Cash flows

Define each of the following terms:d. Free cash flow to equity model

Directions: Fill in the following table using the equation: ∆Cash = - ∆Noncash Assets + ∆Liabilities + ∆Stockholders Equity. Indicate the name of the noncash asset, liability, or equity account affected by the transaction and if change in cash is classified as operating (O), investing (I), financing (F), or noncash (NC). The first line has been completed for you as an exampleItem∆Cash = - ∆Noncash Assets + ∆Liabilities + ∆Stockholders Equity1. Prepaid office rent for cash -O = - + Prepaid Rent + + 2. Sale of land held for cash = - + + 3. Cash payment of taxes payable = - + + 4. Issue preferred stock to investors for cash = - + + 5. Purchase equipment that is financed directly by the seller = - + + 6. Paid cash dividend = - + + 7. Pay notes payable = - + + 8. Pay interest payable = - + +

Q . Which of the following statements is not true?a) The return on shareholders’ funds can be calculated as profit after tax /total equity x 100b) The dividend cover ratio can be calculated from the Income statement andthe statement of cash flows and the answer will be the samec) The interest cover ratio can be calculated from the income statement andthe statement of cash flows and the answer will be differentd) The operating profit margin is also called the net profit margin