Question 86 Martin Johnson, CFA, is a stock analyst at High Mountain Investments. He uses several methods and a variety of ratios to determine a value for different equity securities. Four ratios that he commonly uses are the Price to Book Value (P/BV) Ratio, the Price to Earnings (P/E) Ratio, the Price to Sales (P/S) Ratio and the Price to Cash Flow (P/CF) Ratio. Along with the usefulness of these ratios, Johnson recognizes that there are a number of drawbacks associated with using each of them. The two drawbacks that are of most concern to his current analysis are: Drawback #1: Failure to capture differences in cost structures across companies. Drawback #2: Inflation and technological change may make this ratio difficult to compare across firms. Which of the following ratios is most susceptible to the above drawbacks, respectively? Drawback #1 Drawback #2 A) P/S Ratio P/BV Ratio B) P/CF Ratio P/E Ratio C) P/E Ratio P/BV Ratio D) P/S Ratio P/CF Ratio
Question 87 Marc Juneau, CFA, an equity analyst, is valuing Avalon Games, Inc. He expects the company to grow at 30% for three years. Beginning in year 4, the growth rate is expected to reach 7% and stabilize. The required return for this type of company is estimated at 13%. The dividend in year 1 will be $3.00. The value Juneau should calculate for the stock of Avalon Games is closest to: A) $65. B) $72. C) $87. D) $45.
Question 88 Assuming that a company has an actual return on equity less than its shareholders' required return on equity and that all other variables remain unchanged, which of the following would increase the firm's price/earnings ratio? A) The yield on T-Bills increases. B) Investors become more risk averse. C) The dividend payout ratio decreases. D) The level of inflation is expected to decline.
Question 89 Porter’s five factors for determining the intensity of competition within an industry are least likely to include: A) threat of new entrants. B) regulatory environment. C) potential substitutes. D) bargaining power of buyers.
Question 90 The top-down approach to security valuation begins with the analysis of: A) an industry. B) the economy. C) company fundamentals. D) portfolio risk and return.
| 
发表于 2008-11-6 18:13
| 
