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Question:41 1 t/ D. F0 U0 z/ \# z
There are at least four factors that contribute to a firm’s profitability and pricing decisions. All of the following are factors that firms consider when establishing their pricing practices EXCEPT:. I: R! N# e1 Q2 U. o
A)product segmentation.
O" G" `1 u* {6 YB)ease of entry into the industry.' u4 p: n7 D. V, [
C)degree of industry concentration.) v% M0 e p8 U9 e. v! C
D)product demographics.
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Question:42
! ^7 t$ O5 G- s7 C0 j$ b; {Jax, Inc., pays a current dividend of $0.52 and is projected to grow at 12 percent. If the required rate of return is 11 percent, what is the current value based on the Gordon growth model?
! x/ n/ e6 D q7 |! w& PA)$39.47.
4 g3 v- {* |4 B/ G) Q, eB)unable to determine value using Gordon model.7 d: V# L) @7 u: j8 f) N, U5 I
C)$53.32.
9 `6 h* f3 W7 _- X& y4 LD)$58.24.9 h; A2 ` i# G1 |8 x: w; d! y9 m9 S
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( i# D, L- a- C+ [Question:43 ) ^7 M' p/ t# ?2 o& W
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:
0 h' f6 ~) l2 v1 dA)earnings before interest and taxes (EBIT) less taxes. W* Z) g1 ^3 ^' x3 }8 o
B)after-tax interest and net borrowing.
/ D9 O) q: `4 Z/ sC)before-tax interest and net borrowing.
5 `( \5 g M8 ~7 f( V6 ?# z' aD)capital expenditures.# |7 t5 ]: O+ w+ ]; x5 U" P1 |
3 u I" q# Q3 s, k8 b% n- C' VQuestion:44
2 C0 g6 g5 B7 z/ s* h$ ]; W v1 fGood Sports, Inc., (GSI) has a leading price to earnings (P/E) ratio of 12.75 and a 5-year consensus growth rate forecast of 8.50 percent. What is the firm’s P/E to growth (PEG) ratio?- r R) a3 V( a5 K! K& c4 {
A)0.67.
+ \5 [ O) Y8 M1 j$ oB)150.00.! j" R( G% I+ O- @" j
C)6.67.
. d3 b: B! Q' K; a% YD)1.50.
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Question:45
+ W# |+ H6 m! \A method commonly used to normalize earnings is the method of:
. u C+ D0 l6 o2 r0 GA)average return on assets.
" N1 |" c; w; {. x+ g/ {B)historical average earnings per share (EPS).
3 `) W N6 |. i RC)comparables.! {6 R3 f+ b$ x) h
D)forecasted fundamentals.
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