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Question:41
@' Q5 T* z- B- ]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:* u C9 c4 {) C% `' a5 t% b& V
A)product segmentation.
* L2 I, ]5 \6 x: G3 JB)ease of entry into the industry.
: B$ i6 _& r7 a$ `C)degree of industry concentration.5 k+ l& N$ ]. g0 e4 q. w2 o: L
D)product demographics.; [" t7 D" q$ e2 m
! i5 Z2 I7 O; W! HQuestion:42
5 l' `- V' y6 y2 V, CJax, Inc., pays a current dividend of $0.52 and is projected to grow at 12 percent. If the required rate of return is 11 percent, what is the current value based on the Gordon growth model?% m k& r, ~" y+ Z8 p$ J
A)$39.47.9 c3 }& K! g: W8 ?4 \8 q
B)unable to determine value using Gordon model.
9 \/ L. U5 f$ C+ H& Z! E! A. MC)$53.32.
, o: d. g7 y! [+ ^$ |; m% \9 yD)$58.24.
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) P3 v m( w. ]' QQuestion:43
: m1 ~, e, [( W) V) J/ k2 VThe difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:/ `2 k9 J( P% U% O3 R% j
A)earnings before interest and taxes (EBIT) less taxes.
- t" d8 f! E' H9 s3 u- h2 i1 KB)after-tax interest and net borrowing.% w0 _5 P" [: s0 Q( q
C)before-tax interest and net borrowing.% | a O: m) c1 G$ f7 F6 f6 K
D)capital expenditures.
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- E) u, L. K$ m: j/ `9 JQuestion:44
3 R6 H$ {$ ]: }4 }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?
; [, s' G3 w' p- t) p1 f6 g0 }$ F' gA)0.67.! X; r) A' q8 m! }* A E
B)150.00.
+ s7 Q5 w: O- jC)6.67.
- d! H. b3 z7 A1 N! o! eD)1.50., Q6 f5 F1 B) m/ U& d5 G1 R
5 n: n7 u: ~3 i% f0 ?! ]5 a& gQuestion:452 D7 |/ w* ^& o8 X: r1 ]* I
A method commonly used to normalize earnings is the method of:) `2 V8 G: S; \9 U
A)average return on assets./ m& W [2 T$ K, {5 w+ j
B)historical average earnings per share (EPS).8 B3 @! { I7 K' i6 V& b) E3 F
C)comparables.6 N$ n$ m: X- G5 _% j( E
D)forecasted fundamentals.
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$ {$ X" K. Y% k7 f/ L, _& U& K, S0 `% H" ]
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