1. Provide an example of when it would be appropriate to use each of the following models:
a. Free Cash Flow
b. Price/Earnings Ratio
2. Unique Venture Corp. 15% Convertible Preferred shares have a face value of $1,000. Surrender of the preferred shares gives the preferred holder 50 shares of common stock. The stock trades at $15 per share. The convertible preferred shares trade at par. At what common stock share price are you indifferent about converting the convertible preferred shares into common stock shares?
A. $15.00 B. $18.50 C. $20.00 D. $35.00 E. $50.00