Q18. An analyst has gathered the following data about Jackson, Inc.:ffice ffice" />
- Payout ratio = 60%.
- Expected growth rate in dividends = 6.7%.
- Required rate of return = 12.5%.
What will be the appropriate price-to-book value (PBV) ratio for ffice:smarttags" />Jackson, based on fundamentals?
A) 0.58.
B) 1.73.
C) 1.38.
Correct answer is B)
Return on equity (ROE) = g / (1 ? payout ratio) = 0.067 / 0.40 = 0.1675 or 16.75%.
Based on fundamentals:
PBV = (0.1675 ? 0.067) / (0.125 ? 0.067) = 1.73.
Q19. A firm has a payout ratio of 35%, a return on equity (ROE) of 18%, an estimated growth rate of 13%, and its shareholders require a return of 17% on their investment. Based on these fundamentals, a reasonable estimate of the appropriate price-to-book value ratio for the firm is:
A) 1.25.
B) 2.42.
C) 1.58.
Correct answer is A)
Q20. What is the justified trailing price-to-earnings (P/E) multiple of a stock that has a payout ratio of 40% if the shareholders require a return of 16% on their investment and the expected growth rate in dividends is 6%?
A) 4.00.
B) 4.24.
C) 6.36.
Correct answer is B)
P0/E0 = (0.40 × 1.06) / (0.16 – 0.06) = 4.24
Q21. The Farmer Co. has a payout ratio of 65% and a return on equity (ROE) of 16% (assume that this is expected ROE for the upcoming year). What will be the appropriate price-to-book value (PBV) based on return differential if the expected growth rate in dividends is 5.6% and the required rate of return is 13%?
A) 1.48.
B) 0.71.
C) 1.41.
Correct answer is C)
Based on return differential:
P0 / BV0 = (ROE1 ? g) / (r ? g) = (0.16 ? 0.056) / (0.13 ? 0.056) = 1.41.
[此贴子已经被作者于2009-3-9 17:09:33编辑过] | 
发表于 2009-3-9 17:08
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