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Question:41 " P7 z& [( h0 b+ k, C
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:" X7 n% I' z7 ]& K7 _
A)product segmentation.- d6 E/ P) Q4 x6 ^
B)ease of entry into the industry.
: U' H, b+ o& C3 s, YC)degree of industry concentration.
0 ]$ h& u5 |4 G Y9 iD)product demographics.$ ], ?: H3 q9 \& \! v
4 R+ f: f: N4 ^( eQuestion:42
- b! @. H$ A+ f& y- IJax, 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?
+ @* }1 j2 i0 a+ U4 \0 y" RA)$39.47.) b# W$ \+ h2 ?( ?. ~5 _4 @6 p
B)unable to determine value using Gordon model.
& g8 q- V( D+ U' ?+ O3 a. |C)$53.32.9 Y, R: @* E8 o
D)$58.24.
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' m# {% K$ D8 l+ _7 C! wQuestion:43 - @3 r, }8 q7 a" U
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:$ @! }" ~1 P' Z; w& |* t
A)earnings before interest and taxes (EBIT) less taxes.
% V# c$ n1 T* @! l: c7 b& jB)after-tax interest and net borrowing.& W1 P8 y+ M5 v3 z9 _
C)before-tax interest and net borrowing.6 ]1 A# f' N$ t/ O: q
D)capital expenditures.
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; D% J% c1 c3 n9 C& T L& m; W- |Question:448 r- \1 S5 N' z- h
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?; ?1 A# P c# P I
A)0.67.- N7 O' [8 y% c
B)150.00.. S1 c( v8 _) V6 u6 v
C)6.67., {% {6 T3 r- j$ A
D)1.50.# H: n3 F. d! t9 J
, G G6 \) m7 K& y$ h$ d; Y* _Question:45" m3 o% x# p$ ]" r7 U' d B0 @2 ]
A method commonly used to normalize earnings is the method of:
3 ` W5 \. ]' y. K- a- I& sA)average return on assets.
X4 S+ h0 G5 `8 z- wB)historical average earnings per share (EPS).
. @- U6 I) c0 g7 D0 _; k; L# @! QC)comparables.6 T; s3 a0 Q1 d/ Q* z
D)forecasted fundamentals.& I: p* A% D% M9 y0 D1 f% e
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