Which of the following statements concerning security valuation is FALSE?
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A) |
The liquidity risk of countries refers to the size and activity of the country's capital markets. |
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B) |
One minus the dividend payout ratio is the firm's sustainable growth rate. |
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C) |
If the firm's payout ratio is 40%, has a required return of 12%, and a dividend growth rate of 7%, the firm's price to earnings (P/E) ratio should be 8. |
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D) |
The nominal risk-free rate can be estimated by adding the real risk-free rate to the expected inflation premium. |
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The correct answer was B) One minus the dividend payout ratio is the firm's sustainable growth rate.
One minus the dividend payout ratio is the firm’s retention rate. The sustainable growth rate is the firm’s return on equity (ROE) times the retention rate. | 
发表于 2006-4-27 14:56
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