Which of the following statements concerning security valuation is FALSE?
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A) |
Determining the value of a company with supernormal growth requires finding the present value of the dividends during the supernormal growth and adding that to the present value of the stock computed for the period of normal growth. |
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B) |
A firm with an expected dividend payout ratio of 40%, a required rate of return of 12%, and a dividend growth rate of 5% has an estimated price to earnings (P/E) ratio of 5.7. |
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C) |
The top-down valuation approach requires an assessment of industry influences on the company's value first, then stock-specific influences. |
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D) |
A firm with a 20% return on equity (ROE) and a dividend payout ratio of 30% will have a sustainable growth rate of 14%. |
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The correct answer was C) The top-down valuation approach requires an assessment of industry influences on the company's value first, then stock-specific influences.
The top-down valuation approach requires an assessment of general economic conditions first, then industry influences on the company’s value, and then stock-specific influences. | 
发表于 2006-4-27 14:55
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