81、Chu Wang, CFA, gathered the following data to estimate the implied growth rate of dividends for Shenghai Toys Co. to use as an input for valuing the company's common stock.

Return on Assets             10%

Profit Margin           5%

Total Assists           CNY 50 million

Debt Ration            40%

Payout Ration         25%

Wang's estimate of Shenghai Toys' implied growth rate would be closest to:

Select exactly 1 answer(s) from the following:

A. 4.17%.

B. 6.25%.

C. 12.50%.

D. 18.75%.

82、Which of the following is the least accurate statement about the short sale of stocks?

Select exactly 1 answer(s) from the following:

A. The short seller must pay any dividends due to the lender of shares.

B. A stop buy order would enable a short seller to minimize potential losses.

C. Short sales involve time limits for returning the shares borrowed to the lender.

D. A short sale can be made only on an uptick or a zero uptick trade if the previous trade was an uptick trade.

83、The appropriate measures of free cash flow and discount rate to use when estimating the total value of a firm, respectively, are:

	Measure of free cash flow	Discount rate
A.	operating cash flow before interest payments on debt	cost of equity
B.	operating cash flow before interest payments on debt	weighted average cost of capital
C.	operating cash flow before interest payments on debt but after deducting base capital expenditures	cost of equity
D.	operating cash flow before interest payments on debt but after deducting base capital expenditures	weighted average cost of capital

Select exactly 1 answer(s) from the following:

A. Answer A.

B. Answer B.

C. Answer C.

D. Answer D.

84、On January 1, 2008, Abel Moreno, CFO of Monterrey Mining & Metals (MMM), gathered the following data to determine the attractiveness of the company's common stock:

Dividends per share in 2001	2 pesos
Dividends per share in 2007	3 pesos
Expected return on the market	17%
Expected nominal risk-free return	9%
MMM’s beta	1.8
MMM share price, January 1, 2008	19 pesos

Based on the information gathered, MMM stock's intrinsic value and its attractiveness on January 1, 2008, respectively, were:

	Stock's intrinsic value closest to:	Stock's attractiveness
A.	18.29 pesos	Over-valued
B.	18.29 pesos	Under-valued
C.	19.57 pesos	Over-valued
D.	19.57 pesos	Under-valued

Select exactly 1 answer(s) from the following:

A. Answer A.

B. Answer B.

C. Answer C.

D. Answer D.

85、Strongsville Fabricators Inc. uses the FIFO method of inventory valuation. Assuming a rising costs environment and other factors held constant, Strongsville's price-to-earnings and price-to-book multiples relative to those for another company that uses the LIFO method of inventory valuation would be:

	Price-to-earnings multiple	Price-to-book multiple
A.	overstated	overstated
B.	overstated	understated
C.	understated	overstated
D.	understated	understated

Select exactly 1 answer(s) from the following:

A. Answer A.

B. Answer B.

C. Answer C.

D. Answer D.

[此贴子已经被作者于2008-11-6 11:04:56编辑过]

答案和详解如下：

81 Correct answer is C

“An Introduction to Security Valuation: Part II,” Frank K. Reilly and Keith C. Brown
2008 Modular Level I, Vol. 5, pp. 196-198
Study Session 14-60-e
estimate the implied dividend growth rate, given the components of the required return on equity and incorporating the earnings retention rate and current stock price
g = RR x ROE
RR = (1 – Payout Ratio) = 1 – 0.25 = 0.75
Financial Leverage = TA / Equity
Debt = TA x Debt Ratio = CNY 50 m x 0.4 = CNY 20 m
Equity = CNY 50 m – CNY 20 m = CNY 30 m
ROE = ROA x Financial Leverage; ROE = 10% x (50/30) = 16.67%
g = 0.75 x 16.67 = 12.50%

82 Correct answer is C

“Organization and Functioning of Securities Markets,” Frank K. Reilly and Keith C. Brown
2008 Modular Level I, Vol. 5, pp. 24-26
Study Session 13-52-f
describe the process of selling a stock short and discuss an investor’s likely motivation for selling short
Short sales have no time limits. However, if the lender of shares decides to sell them, the broker must find another investor willing to lend the shares.

83 Correct answer is D

“An Introduction to Security Valuation: Part II,” Frank K. Reilly and Keith C. Brown
2008 Modular Level I, Vol. 5, pp. 184-185
Study Session 14-60-f
describe a process for developing estimated inputs to be used in the DDM, including the required rate of return and expected growth rate of dividends
In estimating the value of total firm, the free cash flow available to both stockholders and bondholders should be used. Therefore, operating cash flow before debt related costs and after subtracting the required capital expenditures is the appropriate measure of free cash flow. As the value of the total firm includes the value of equity and the value of debt, the weighted average cost of capital is the relevant discount rate.

84 Correct answer is D

“The Time Value of Money,” Richard A. DeFusco, Dennis W. McLeavy, Jerald E. Pinto, and David E. Runkle
2008 Modular Level I, Vol. 1, pp. 199-200
“Cost of Capital,” Yves Courtois, Gene C. Lai, and Pamela p. Peterson
2008 Modular Level I, Vol. 4, p. 50
“An Introduction to Security Valuation: Part II,” Frank K. Reilly and Keith C. Brown
2008 Modular Level I, Vol. 5, p. 176-181, 198
Study Sessions 2-5-d; 4-45-h; 14-60-b, e
Calculate and interpret the future value (FV) and present value (PV) of a single sum of money, an ordinary annuity, an annuity due, a perpetuity (PV only) and a series of unequal cash flows;
calculate and interpret the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yield-plus risk-premium approach;
calculate and interpret the value both of a preferred stock and a common stock using the dividend discount model (DDM);
estimate the implied dividend growth rate, given the components of the required return on equity and incorporating the earnings retention rate and current stock price
g = growth rate of dividends = 7% [(3 / 2)1 / 6]; k = 9 + 1.8 (17 - 9) = 23.4%
V = 3(1.07) / (0.234 - 0.07) = 19.57 pesos;
The stock’s intrinsic value > price, so it is undervalued.

85 Correct answer is D

“Introduction to Price Multiples,” John D. Stowe, Thomas R. Robinson, Jerald E. Pinto, and Dennis W. McLeavey
2008 Modular Level I, Vol. 5, pp. 208-209, 216-217
Study Session 14-61-b
calculate and interpret P/E, P/BV, P/S, and P/CF
In a rising costs environment, FIFO would result in higher earnings, higher ending inventory, as well as higher book value of equity. Thus, both P/E and P/BV tend to be understated relative to a comparable firm that uses LIFO method.

多谢

thnaks

thanks

thanks

非常感谢啊