Question

Which of the following statement is incorrect? The market values of the assets are the amounts the assets would earn on the open market if they were sold (or liquidated). We value individual shares of common stock by estimating the future value of the expected future net income and the expected price of the coupons when the coupons are sold. The replacement value of assets valuation method assumes that the market value of a complete business cannot exceed the amount it would take to buy all of the firm's assets on the open market. Most of the answers are correct. To value preferred stock, we adapt the discounted cash flow model to reflect that preferred stock dividends are a perpetuity.

Answer 1

b.We value individual shares of common stock by estimating the future value of the expected future net income and the expected price of the coupons when the coupons are sold

individual shares are of common stock are valued by estimating the present value of expected future net income and the expected price of coupons when coupons are sold.