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Question:41 3 L' w) {( ~- _0 o. D: K
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:
3 P3 _( Q$ ]1 `9 Y+ GA)product segmentation.
* a9 q3 Q8 R; P) c; O5 s0 gB)ease of entry into the industry.
( i7 |; a) q* oC)degree of industry concentration.
: Q( _" T: U- J* XD)product demographics.6 M* ~6 ?7 }( v) v* S4 w3 _; G
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Question:42 7 m& j- A" t. z$ s' t* N
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?: V' D! {6 z# d2 L
A)$39.47.
' A6 q ~9 P5 x: }& a& RB)unable to determine value using Gordon model.
* q/ i- u3 ?; K- ~, nC)$53.32.
0 @* O! n) s- R8 f5 G2 xD)$58.24.' Y, T5 F, K% h, i/ u, f& Z
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Question:43 8 U* c3 Y) A/ u, w
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:
( d+ d+ v+ }$ {$ U. YA)earnings before interest and taxes (EBIT) less taxes.% b( V& |4 k, p- n2 \ U
B)after-tax interest and net borrowing.
; K. @: w0 c$ L7 p" Y9 u7 j" xC)before-tax interest and net borrowing.' p+ p" Q' T8 h; t+ D0 j
D)capital expenditures.& j; T. h; f2 |2 p4 O0 k
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Question:44
4 F& B/ ~! v. k6 a/ n" ~$ kGood 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?8 |, F6 l! o% j# _, l
A)0.67.+ o" t/ h: d s) p
B)150.00.7 e& ]" d& x" s
C)6.67.& v( l C7 w6 s& `4 I E
D)1.50.
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Question:45# U7 ~/ m& O9 U
A method commonly used to normalize earnings is the method of:. g2 u, O4 N" u4 c* J3 A
A)average return on assets.
' J- x/ T4 n2 \2 i* E+ |B)historical average earnings per share (EPS).
2 A+ E, q. _) ^C)comparables.9 k8 U! n0 R; g& T! q( v+ U
D)forecasted fundamentals.- Y# ?2 k* I$ |- k5 j9 e
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