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Question:41
; \6 u9 H$ _ Q0 B4 P" u. jThere 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:, q" s7 |- l: f
A)product segmentation.: d4 a7 }" {3 L0 p/ ]1 u' R7 T
B)ease of entry into the industry.: i+ M& ^- ]' I( B% t
C)degree of industry concentration.6 ?5 z6 ^$ ^4 f( S0 x2 Y9 F g1 v
D)product demographics.
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Question:42
2 _! W2 h- a7 F+ A+ mJax, Inc., pays a current dividend of $0.52 and is projected to grow at 12 percent. If the required rate of return is 11 percent, what is the current value based on the Gordon growth model?
. [! Y$ p. r5 @( l3 ~) S x4 L; iA)$39.47.
* j5 o8 W% h% ~: i% T' s0 g$ T* ~B)unable to determine value using Gordon model.$ g5 K1 N- T4 J) d
C)$53.32.3 T" D+ q: l% m
D)$58.24.. ?. @- W6 Q$ Z, u8 P: i$ F
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Question:43
- F4 a9 B& Y2 R* O7 oThe difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:
4 N' _$ c: }1 t- FA)earnings before interest and taxes (EBIT) less taxes.
- h" N/ |" t: f1 SB)after-tax interest and net borrowing.- m" E' V. Z- H# c `" X
C)before-tax interest and net borrowing.; D9 {" X _$ e+ q) M
D)capital expenditures.
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! q0 S% ?- Z" W( H9 z$ B, TQuestion:44, k9 @2 G8 z6 I1 M! W3 [
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?
r( E6 H6 B. b# T# S# \5 }/ D, {+ iA)0.67.
) E4 U' R1 N2 R9 MB)150.00.) v1 _: I& `5 E
C)6.67.
$ ^, y; U& P, B" k) b$ gD)1.50.
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Question:45
$ B5 |6 _. G6 z4 Q; n fA method commonly used to normalize earnings is the method of:2 k( D( D( g& b9 H5 S/ x. i# G
A)average return on assets.
1 i9 `9 c- [7 M+ |- q2 Q% s5 wB)historical average earnings per share (EPS).
* g' h, [+ U& Y% d" wC)comparables.
% Q$ \! n* L. X, Q# ~D)forecasted fundamentals.
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