WGU 3D66 Section3 , WGU d366 study questions section
1, D366 Study Guide , Financial Statement Analysis for
Valuation, WGU D366 Section 2 Question and answers
correctly solved 2025/2026
1. Which condition is necessary for a cash-flow-
based valuation model to accurately
estimate firm value?
6.
2. What is the correct interpretation of a
negative num- ber when calculating financing
activities (NetFL)?
3. Which conclusion can be drawn if a cash-flow-
based valuation model returns a firm value
higher than a dividend-based valuation
model?
4. What does the cash-flow-based valuation
approach measure and value?
5. An investor uses a free cash-flow-based
approach to determine the value of a firm.
Which conclusion may be drawn if the
determined value of the firm is less than
that of its stock?
,Cash flow for the project- ed terminal value needs to be positive.
The cash flow projection for the terminal value must be positive for the valu-
ation model to return a valid estimate of firm val- ue.
Financial assets are greater than financial lia- bilities
The terminal value for cash flows is higher than the dividend perpetuity.
Cash flows that are avail- able for distribution to all shareholders
The firm's equity shares are overpriced.
If the value of a firm is determined to be greater than that of
its equity shares, these shares would be consid- ered overpriced.
, WGU 3D66 Section3 , WGU d366 study questions section 1,
D366 Study Guide , Financial Statement Analysis for Valuation,
WGU D366 Section 2
The cash-flow-based valuation approach is used to True
measure and value cash flows that a firm has available The cash-flow-
based valu-
to distribute to its shareholders ation approach is
used to measure and
value avail- able cash
flows that a firm can
distribute to its share-
holders.
7. Given the rearrangement of the balance
sheet for cash-flow-based valuation, what do Net financing
net operating as- sets equal? activities plus
shareholders' equity
8. In a cash-flow-based valuation for an
acquisition, when would a company use a
weighted average cost of capital as a discount In an acquisition of
rate? assets, where the
financing struc- ture is
similar
9. Which procedure is accurate regarding the treatment Adding back
after-tax in-
of interest in the calculation of free cash flows, Which cash flow
when starting from cash flows from valuation
operations? model
should
Company A
use?
10. Company A intends to acquire the net
operating as- sets of Company B and needs
to determine their val- ue. 11. What should
, be considered when incorporating the terest expense when cal-
culating free cash flow
for all debt and equity
stake- holders
DCF Model: a valuation
technique used to
esti- mate the intrinsic
value of an investment
by consid- ering its
expected future cash
flows.
Only cash that is not need-
cash account on the balance sheet for calculating free ed for operating
liquidity
cash flow available for debt and equity stakeholders? should be
considered
1, D366 Study Guide , Financial Statement Analysis for
Valuation, WGU D366 Section 2 Question and answers
correctly solved 2025/2026
1. Which condition is necessary for a cash-flow-
based valuation model to accurately
estimate firm value?
6.
2. What is the correct interpretation of a
negative num- ber when calculating financing
activities (NetFL)?
3. Which conclusion can be drawn if a cash-flow-
based valuation model returns a firm value
higher than a dividend-based valuation
model?
4. What does the cash-flow-based valuation
approach measure and value?
5. An investor uses a free cash-flow-based
approach to determine the value of a firm.
Which conclusion may be drawn if the
determined value of the firm is less than
that of its stock?
,Cash flow for the project- ed terminal value needs to be positive.
The cash flow projection for the terminal value must be positive for the valu-
ation model to return a valid estimate of firm val- ue.
Financial assets are greater than financial lia- bilities
The terminal value for cash flows is higher than the dividend perpetuity.
Cash flows that are avail- able for distribution to all shareholders
The firm's equity shares are overpriced.
If the value of a firm is determined to be greater than that of
its equity shares, these shares would be consid- ered overpriced.
, WGU 3D66 Section3 , WGU d366 study questions section 1,
D366 Study Guide , Financial Statement Analysis for Valuation,
WGU D366 Section 2
The cash-flow-based valuation approach is used to True
measure and value cash flows that a firm has available The cash-flow-
based valu-
to distribute to its shareholders ation approach is
used to measure and
value avail- able cash
flows that a firm can
distribute to its share-
holders.
7. Given the rearrangement of the balance
sheet for cash-flow-based valuation, what do Net financing
net operating as- sets equal? activities plus
shareholders' equity
8. In a cash-flow-based valuation for an
acquisition, when would a company use a
weighted average cost of capital as a discount In an acquisition of
rate? assets, where the
financing struc- ture is
similar
9. Which procedure is accurate regarding the treatment Adding back
after-tax in-
of interest in the calculation of free cash flows, Which cash flow
when starting from cash flows from valuation
operations? model
should
Company A
use?
10. Company A intends to acquire the net
operating as- sets of Company B and needs
to determine their val- ue. 11. What should
, be considered when incorporating the terest expense when cal-
culating free cash flow
for all debt and equity
stake- holders
DCF Model: a valuation
technique used to
esti- mate the intrinsic
value of an investment
by consid- ering its
expected future cash
flows.
Only cash that is not need-
cash account on the balance sheet for calculating free ed for operating
liquidity
cash flow available for debt and equity stakeholders? should be
considered
