答案和详解如下： 1.Are the statements about the following valuation metrics true or false?
Statement #1 – As compared to the price-to-earnings ratio, the price-to-cash flow ratio is easier to manipulate because management can easily control the timing of the cash flows.
Statement #2 – One of the benefits of earnings per share as a valuation metric is that it facilitates the comparison of firms of different sizes. A) False True B) True False C) False False D) True True The correct answer was C) Although manipulation of cash flow can occur, the P/E ratio is easier to manipulate because earnings are based on the numerous estimates and judgments of accrual accounting. EPS does not facilitate comparisons among firms. Two firms may have the same amount of earnings but the number of shares outstanding may differ significantly.
2.Would an increase in net profit margin or in the firm’s dividend payout ratio increase a firm’s sustainable growth rate? Net profit margin | Dividend payout ratio |
A) Yes Yes B) No No C) No Yes D) Yes No The correct answer was D) The sustainable growth rate is equal to ROE multiplied by the retention rate. According to the Dupont formula, an increase in net profit margin will result in higher ROE. Thus, an increase in net profit margin will result in a higher growth rate. The retention rate is equal to 1 minus the dividend payout ratio. Thus, an increase in the dividend payout ratio will lower the retention rate and lower the growth rate.
3.An analysis of the industry reveals that firms have been paying out 45 percent of their earnings in dividends, asset turnover = 1.2; asset-to-equity (A/E) = 1.1 and profit margins are 8 percent. What is the industry’s projected growth rate? A) 4.55%. B) 4.95%. C) 5.81%. D) 5.25%. The correct answer was C) ROE = profit margin × asset turnover × A/E = 0.08 × 1.2 × 1.1 = 0.1056
RR = (1 - 0.45) = 0.55
g = ROE × RR = 0.1056 × 0.55 = 0.0581
4.A firm’s financial statements reflect the following: Net profit margin | 15% | Sales | $10,000,000 | Interest payments | $1,200,000 | Avg. assets | $15,000,000 | Equity | $11,000,000 | Avg. working capital | $800,000 | Dividend payout rate | 35% |
Which of the following is the closest estimate of the firm’s sustainable growth rate? A) 9%. B) 8%. C) 10%. D) 11%. The correct answer was A) Return on equity (ROE) = net profit margin × asset turnover × leverage = (0.15)(0.67)(1.364) = 0.137.
The sustainable growth = (1 – dividend rate)(ROE) = (0.65)(0.137) = 8.9%.
5.A firm’s financial statements reflect the following: EBIT | $2,000,000 | Sales | $16,000,000 | Interest expense | $900,000 | Total assets | $12,300,000 | Equity | $7,000,000 | Effective tax rate | 35% | Dividend payout rate | 28% |
Based on this information, what is the firm’s sustainable growth rate? A) 7.35%. B) 8.82%. C) 9.10%. D) 10.63%. The correct answer was A) With this information, ROE = [(0.1250)(1.3008) – 0.0732](1.7571)(0.65) = 0.1021.
Sustainable growth = ROE (1 – dividend payout rate) = 0.1021 × 0.72 = 7.35%. | 
发表于 2008-5-15 10:45
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