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Question:41
( e) o+ h" p. Q- tThere 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:
L, u4 y$ I$ qA)product segmentation.# x5 x- c6 T. C8 Y9 p- _
B)ease of entry into the industry.
( m& }% @& ^& CC)degree of industry concentration.( J% g- c! p/ r0 L/ @6 d
D)product demographics.0 i/ k5 j9 o2 X! k* L
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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?- |4 z* j( x& K Q# X# t
A)$39.47.
' v. e% K' j3 A4 l$ p6 N) d' CB)unable to determine value using Gordon model.
' e8 `# F7 A4 P' W( _3 F! e2 vC)$53.32.2 {1 t9 p! ~2 `/ V. l- z
D)$58.24.
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Question:43 - y$ u4 Q' u" k, `4 I3 K9 ?3 I
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:6 _* O' p1 i6 L d, O7 u5 |6 i
A)earnings before interest and taxes (EBIT) less taxes.% V4 U) C& X% w2 Q( W& d
B)after-tax interest and net borrowing.
# V+ g5 ~" N% L% JC)before-tax interest and net borrowing.# J8 |+ A% M W. M9 F
D)capital expenditures.' U$ t4 U* y! {/ c/ M
6 k& ]2 z0 x8 @! ]/ |+ r9 IQuestion:44) @! R# e" c9 O8 ]: D
Good 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?
* [# q% `# H* _" s/ ?* i! VA)0.67.' M. ]: m5 u7 C; @- `
B)150.00.
) {+ V f; y* e& BC)6.67.
, N/ U$ i L+ w. }D)1.50.
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! K! u, }$ z. h% v% |Question:45
/ Q& Y8 b* r4 V; ZA method commonly used to normalize earnings is the method of:
1 r4 l) J3 c* BA)average return on assets.# X& g6 ]: a# R+ H
B)historical average earnings per share (EPS).
$ X% x; E: W6 g- kC)comparables.4 k3 o. _* o5 P
D)forecasted fundamentals.8 C2 \) o9 [: F, {
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