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LOS g: Calculate the justified leading and trailing P/Es based on fundamentals using the Gordon growth model.
Q1. If an asset’s beta is 0.8, the expected return on the equity market is 10.0%, and the appropriate discount rate for the Gordon model is 9.0%, what is the risk-free rate?
A) 5.00%.
B) 6.50%.
C) 2.50%.
Q2. Stan Bellton, CFA, is preparing a report on TWR, Inc. Bellton’s supervisor has requested that Bellton include a justified trailing price-to-earnings (P/E) ratio based on the following information:
Current earnings per share (EPS) = $3.50.
Dividend Payout Ratio = 0.60.
Required return for TRW = 0.15.
Expected constant growth rate for dividends = 0.05.
TWR’s justified trailing P/E ratio is closest to:
A) 4.0.
B) 6.0.
C) 6.3.
Q3. A firm has the following characteristics:
- Current share price $100.00.
- Next year's earnings $3.50.
- Next year's dividend $0.75.
- Growth rate 11%.
- Required return 13%.
Based on this information and the Gordon growth model, what is the firm’s justified leading price to earnings (P/E) ratio?
A) 10.7.
B) 11.3.
C) 8.7.
Q4. A firm has the following characteristics:
- Current share price $100.00.
- One-year earnings $3.50.
- One-year dividend $0.75.
- Required return 13%.
- Justified leading price to earnings 10.
Based on the dividend discount model, what is the firm’s assumed growth rate?
A) 10.9%.
B) 12.4%.
C) 8.6%.
Q5. A firm has the following characteristics:
- Current share price $100.00.
- Current earnings $3.50.
- Current dividend $0.75.
- Growth rate 11%.
- Required return 13%.
Based on this information and the Gordon growth model, what is the firm’s justified trailing price to earnings (P/E) ratio?
A) 8.9.
B) 11.9.
C) 11.3. | 
发表于 2009-3-6 16:22
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