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Q17. Assume 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) 20.00.
C) 5.00.
Q18. Assuming that a company's return on equity (ROE) is 12% and the required rate of return is 10%, which of the following would most likely cause the company's P/E ratio to rise?
A) The firm's ROE falls.
B) The inflation rate falls.
C) The firm's dividend payout rises.
Q19. If a company has a "0" earnings retention rate, the firm's P/E ratio will equal:
A) k + g
B) 1 / k
C) D/P + g
Q20. An analyst gathered the following information for a company:
- Risk-free rate = 6.75%
- Expected market return = 15.00%
- Beta = 1.30
- Dividend payout ratio = 55%
- Profit margin = 10.0%
- Total asset turnover = 0.75
- Assets to equity ratio = 2.00
What is the firm’s sustainable growth rate?
A) 6.75%
B) 15.00%.
C) Tax rate needed to determine answer.
Q21. What is the capital asset pricing model (CAPM) required rate of return for this stock?
A) 10.73%.
B) 19.50%.
C) 17.48%.
Q22. What is the price-earnings ratio for this firm?
A) 18.14X.
B) 5.13X.
C) 22.18X.
Q23. Assuming that the most recent year’s earnings are $2.27, what is the estimated value of the stock using the earnings multiplier method of valuation?
A) $29.14.
B) $41.18.
C) $12.43.
Q24. A company currently has a required return on equity of 14% and an ROE of 12%. All else equal, if there is an increase in a firm’s dividend payout ratio, the stock's value will most likely:
A) increase.
B) either increase or decrease.
C) decrease.
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发表于 2009-3-2 14:13
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