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Question:41 8 O* F$ G8 {4 A* N# L0 X/ `
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:( E+ z9 t% H+ u! Z
A)product segmentation. J% r' y8 z Q* Y, |8 a! a% l
B)ease of entry into the industry.+ L4 ^. W2 x, A
C)degree of industry concentration.5 D' I9 _5 V8 d9 d
D)product demographics.
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# X/ W2 b# n5 x0 a% E% w) aQuestion:42 ; \ E: ~0 r. F/ u, P$ v z
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?
, l! y; e( N5 N7 u4 z' g8 yA)$39.47.9 x9 H# v! m2 G
B)unable to determine value using Gordon model.
. s0 n& E+ m( n; HC)$53.32.
5 v( D2 z5 I; ~$ gD)$58.24.
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+ O, q0 ?8 ]+ f6 nQuestion:43 % q" }/ Q; Q* Y. l
The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:& I2 ]6 S( f, J1 i# P+ }
A)earnings before interest and taxes (EBIT) less taxes.4 p4 j! r# \3 `1 W
B)after-tax interest and net borrowing.
+ \& |1 u: Z) [3 J$ g" S3 iC)before-tax interest and net borrowing.
" L( x+ a' D6 _+ n+ PD)capital expenditures.7 g& r4 m l _( j; T$ k! h" A
1 [' a% o0 o# A9 u c. l: f$ Y4 P
Question:44
5 ~$ {7 K, J- R" Q: yGood 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?
# [: z: U* ?' v" l( xA)0.67.
: U6 a& g$ F+ S* Y# A' kB)150.00.! x1 h; Z6 m6 @/ z
C)6.67./ j" }' Y$ O% \2 n0 v9 l
D)1.50.
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. t. ^5 [ L1 }/ y& y4 u6 eQuestion:453 N- }$ T6 A/ t/ X' ~- ]
A method commonly used to normalize earnings is the method of:
- i4 x: ?: Z- H& KA)average return on assets.4 x- ~) i* }: `9 d1 a: x
B)historical average earnings per share (EPS).
% t0 _0 e) x1 G( ?; Z0 H K2 w( EC)comparables.9 F& i: F; z4 ?% s4 E& F9 B1 A' b
D)forecasted fundamentals.
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