c. 20 d. 25 e 40 PART IT: Concept Questions - Answer all 14 questions (total 21 points). 21. During the course, we discussed and practiced the concept of a dividend discount model to determine the value of a common stock. But we discovered that the model has significant shortfalls: For example, if a company does not pay a dividend, the model gives a resulting value of 'zero' for the common stock; and if the estimated growth rate (g) is greater than our required rate of return (k), we end up with a 'negative value' for the stock. As an alternative to the dividend discount model, what other valuation measures for common stocks were discussed? a. Price to Earnings ratio - Dividing market price of the stock by the earnings-per- share. b. Discounted free cash flow method - Estimating the free cash available to a shareholder several years into the future, and discounting these cash flows back at an appropriate rate of return. c. Price to Book Value ratio -Dividing market price of the stock by the accounting book value (or shareholders equity) on a company's balance sheet. d. "Sum of the Parts" valuation calculation, whereby the separate value attributed to a company's independent subsidiaries is worth more than the market price of the entire company (i.e., the quoted market price) in the secondary markets. e. All of the above