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LOS g: 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.
Q1. Which of the following does NOT directly affect a company’s required return on equity?
A) The company’s beta.
B) Expected market return.
C) Return on assets.
Q2. Regarding a standard dividend discount model (DDM) which of the following factors is least likely to affect the required rate of return on the investment?
A) Expected inflation rate.
B) ROA.
C) Risk-free rate of return.
Q3. A stock’s dividend growth rate is a function of each of the following EXCEPT:
A) profit margin.
B) P/E ratio.
C) total asset turnover.
Q4. A company’s growth rate in dividends and earnings can be estimated as the:
A) difference between the retention ratio and the return on equity.
B) product of the retention ratio and the return on equity.
C) product of the return on equity and the dividend payout ratio.
Q5. The required rate of return on equity used as an input to the dividend discount model is influenced by each of the following factors EXCEPT:
A) the stock's appropriate risk premium.
B) the stock's dividend payout ratio.
C) the expected inflation rate.
Q6. The capital asset pricing model can be used to estimate which of the following inputs to the dividend discount model?
A) The expected inflation rate.
B) The expected growth rate in dividends.
C) The required return on equity.
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发表于 2009-3-2 14:31
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