Reading 60: An Introduction to Security Valuation: Part II

答案和详解如下：

16.ume that a firm has an expected dividend payout ratio of 20%, a required rate of return of 9%, and an expected dividend growth of 5%. What is the firm's estimated price-to-earnings (P/E) ratio?

A)   2.22.

B)   10.00.

C)   20.00.

D)   5.00.

The correct answer was D)

The price-to-earnings (P/E) ratio is equal to (D₁/E₁)/(k – g) = 0.2/(.09 – 0.05) = 5.00.

17.analyst gathered the following data:

 An earnings retention rate of 40%.

 An ROE of 12%.

 The stock's beta is 1.2.

 The nominal risk free rate is 6%.

 The expected market return is 11%.

Assuming next year's earnings will be $4 per share, the stock’s current value is closest to:

A)   $45.45.

B)   $26.67.

C)   $33.32.

D)   $22.24.

The correct answer was C)

Dividend payout = 1 - earnings retention rate = 1 - 0.4 = 0.6

R_S = R_f + B(RM - R_f) = 0.06 + 1.2(0.11 - 0.06) = 0.12

g = (retention rate)(ROE) = (0.4)(0.12) = 0.048

D₁ = E₁ × payout ratio = $4.00 × 0.60 = $2.40

Price = D₁ / (k – g) = $2.40 / (0.12 – 0.048) = $33.32

18.e the following information to determine the value of River Gardens’ common stock:

 Expected dividend payout ratio is 45 percent.

 Expected dividend growth rate is 6.5 percent.

 River Gardens’ required return is 12.4 percent.

 Expected earnings per share next year are $3.25.

A)   $27.25.

B)   $24.80.

C)   $19.67.

D)   $30.12.

The correct answer was B)

First, estimate the price to earnings (P/E) ratio as: (0.45)/(0.124 – 0.065) = 7.63. Then, multiply the expected earnings by the estimated P/E ratio: ($3.25)(7.63) = $24.80.

19.ording to the earnings multiplier model, which of the following factors is the least important in estimating a stock’s price-to-earnings ratio? The:

A)   estimated required rate of return on the stock.

B)   historical dividend payout ratio.

C)   expected growth rate of dividends for the stock.

D)   expected dividend payout ratio.

The correct answer was B)

P/E = (D₁/E₁)/(k - g)

where:
D₁/E₁ = the expected dividend payout ratio
k = estimated required rate of return on the stock
g =  expected growth rate of dividends for the stock

The P/E is most sensitive to movements in the denominator.

20.ich of the following is NOT a determinant of the expected price/earnings (P/E) ratio?

A)   Expected dividend payout ratio (D/E).

B)   Expected growth rate in dividends (g).

C)   Average debt to capital ratio (D/C).

D)   Required rate of return on the stock (K_e).

The correct answer was C)

The P/E ratio is determined by payout ratio D/E, required return K_e, and expected growth g.