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Question:41
" ^6 c( h+ \2 h$ ^: h/ f' [9 W; }1 R4 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:
9 B4 ? w( u- K: s" dA)product segmentation.1 j3 i$ b+ O* b, o: ]; J
B)ease of entry into the industry.- L. h' h" L* P, L& S3 u4 `
C)degree of industry concentration.
$ {3 e8 \, W. X1 s6 L1 k. kD)product demographics.2 k! k2 [4 [: B3 h
* ]7 h, C/ e X: o4 zQuestion:42 $ ^, K, I4 K9 a% ^/ ~8 G
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?
' G) q, z7 Y0 [5 C; ~, Q4 X8 |A)$39.47.
5 m+ W% j G4 ?" W% z `% xB)unable to determine value using Gordon model.
7 a& [. X3 A3 Q1 N/ P* qC)$53.32.
8 D; |3 f; O# [- P; LD)$58.24.
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. [( g0 `$ p0 U/ c) AQuestion:43 * ?0 h( s: f5 N& I: t, E
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:
6 `3 {2 l' _! _& P& z; p. a0 {A)earnings before interest and taxes (EBIT) less taxes.% B% I2 v, @9 H8 T% F
B)after-tax interest and net borrowing.
/ v. j/ |# X! L/ H( h) P6 XC)before-tax interest and net borrowing.0 o1 J2 U& F# O% d2 K
D)capital expenditures.0 C7 I3 P0 y6 [
, z8 ^6 S! x3 A0 G2 IQuestion:445 g/ `- ]: h% T, f g
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?: F/ D- ~3 E8 k
A)0.67.
. L% L0 t, L4 k) [B)150.00.& ?4 i! j3 x, [9 [, e7 I8 E( e9 r9 J
C)6.67.2 f9 P! k: Z8 Q
D)1.50.( k: X, j) I5 H6 L2 [
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Question:45: t4 m# V6 H% e# c; Y5 d- Q
A method commonly used to normalize earnings is the method of:' C9 E) S$ `$ R/ @
A)average return on assets.) t* y j' T% N, }5 G% u9 e
B)historical average earnings per share (EPS).9 v& J! A# {; B5 @4 a7 }% Y
C)comparables.3 p/ ?$ C& Y2 A% e6 H! G( B
D)forecasted fundamentals.
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