Chapter 1

1. Explain a firm's fundamental value (which is also called its intrinsic value). Identify what might cause a firm's intrinsic value to be different from its actual market value.
2. Describe some similarities and differences among broker-dealer networks, alternative trading systems (ATS), and registered stock exchanges.
3. Identify similarities and differences between the NYSE and the NASDAQ Stock Market.

Chapter 2

1. Explain if a "typical" firm reports $20 million of retained earnings on its balance sheet, can the firmdefinitely pay a $20 million cash dividend.
2. Explain the difference between NOPAT and net income, and identify which is a better measure of the performance of a company's operation.
3. Explain free cash flow and why it is the most important measure of cash flow.

Chapter 3

1. Profit margins and turnover ratios vary from one industry to another. Identify differences would you expect to find between a grocery chain and a steel company? Consider particularly the turnover ratios, the profit margin, and the DuPont equation.
2. Identify how (a) seasonal factors and (b) different growth rates distort a comparative ratio analysis? Provide an example. Explain how these problems could be alleviated.
3. Describe why it is sometimes misleading to compare a company's financial ratios with those of other firms that operate in the same industry.