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Question:41
" w% D6 u! M$ S) x8 xThere 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:$ ]. J' D, q8 s# D" s f, ?+ u$ J) d
A)product segmentation.
, ]; ~1 p s! y4 Y: ~: ZB)ease of entry into the industry.
& s. b- F/ A9 n5 N% FC)degree of industry concentration.
, }, ?# {" V; ED)product demographics.( S/ F; n! h1 E
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Question:42 " J: x9 o' K, G; D5 N+ P' d' z
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? ]5 L# @1 }0 V- {
A)$39.47.
; X& f4 q2 Q! H |# I$ M! s2 S8 yB)unable to determine value using Gordon model.- ?' X4 F- k' I: P- b( n9 N; O
C)$53.32.
$ `' \6 x0 P& |$ GD)$58.24.
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Question:43 . e1 L9 O+ R$ r' m# k0 Z
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:
2 p j. d& Z2 L: K2 I8 o. ]3 C LA)earnings before interest and taxes (EBIT) less taxes.* A4 _8 ?3 @: M( ?* N) e' e9 B" p
B)after-tax interest and net borrowing.$ k& t' o% c, E9 A' s/ y+ s" H
C)before-tax interest and net borrowing.2 H8 C: F7 Y8 D0 r% s0 E. P
D)capital expenditures.5 S) K! c. o2 r2 d6 j3 b3 L5 D
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Question:44
2 H/ D: g$ W `; p' @' q$ G% |; LGood 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?
9 Y9 c/ H% ~. v! b# ~, @- xA)0.67.
. \8 s3 p6 _/ p9 r5 M3 P( e0 OB)150.00.) _- U }( \) ]6 y
C)6.67.' @! s' ^- q- N* D2 y
D)1.50.
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Question:45
$ ^1 p. O d2 zA method commonly used to normalize earnings is the method of:
9 e2 Q [: v, ^* w" }9 OA)average return on assets.
; G7 ~ o& w Z7 F- S0 ]& K2 rB)historical average earnings per share (EPS).
& v- c8 l9 H L( _C)comparables.
) H/ j& ~, s/ t! W' s4 e$ D* WD)forecasted fundamentals.1 e: ?& w/ D1 y: H
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