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Question:41 : j+ f* V( x" ^! d* b7 W6 ~
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:/ X) c$ ^6 l2 b8 y3 o& ~
A)product segmentation.
; f6 I/ w- S. n0 o( [5 @- d! mB)ease of entry into the industry.
: s# h6 i% q3 g3 K" H5 A) ZC)degree of industry concentration." h& I. T6 N2 U
D)product demographics.6 J1 ~- n) t, l' Z9 k
! ^& W) L7 z! K# S: U1 P0 |' p% oQuestion:42 1 m! C4 v4 ]6 m4 k1 Y2 {
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" U# k& U% l
A)$39.47.& @+ p: A. d8 Z9 V) n- H0 Q3 O
B)unable to determine value using Gordon model.
$ a7 z' l' O' o! f* j0 z7 z$ \2 JC)$53.32.5 [8 o0 l0 T) E% d5 A& R
D)$58.24.6 [1 P$ X' \ w% W$ R/ Z E
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Question:43
1 b6 t, ? L2 LThe difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:6 q, S9 L( c6 N) `" q$ N( A7 J, _
A)earnings before interest and taxes (EBIT) less taxes.! j; q( }! ~2 e. A% f; v
B)after-tax interest and net borrowing.
; |! i( Y3 I* a, B: Q! gC)before-tax interest and net borrowing./ P3 v _& P; N" W
D)capital expenditures.
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4 e' U9 k: G% [2 EQuestion:44
4 ? _* h5 ?( r) ~8 n2 yGood 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?
( [) @! v( e/ f9 {; D1 D0 uA)0.67." S: @- ]' c! N0 y3 [
B)150.00.
E$ Z _1 c. K! {C)6.67.* o0 L+ f2 Q0 ~0 c: q
D)1.50.9 }1 L3 G M! g
8 H2 q0 F5 R6 E; JQuestion:45' k/ k3 w& [: x
A method commonly used to normalize earnings is the method of:
0 } ^; G/ T$ r1 j4 R5 WA)average return on assets.( |$ C0 P' ~& Q/ p% b
B)historical average earnings per share (EPS).
& Z( I( `* X! `7 h0 r/ ~' cC)comparables.& y9 `) L' t( x \ a( E+ u" g3 w7 X2 M- W
D)forecasted fundamentals.+ v% U9 i V) f. a N2 j
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