Reading 60: An Introduction to Security Valuation: Part II

答案和详解如下：

21.irm has an expected dividend payout ratio of 50 percent, a required rate of return of 18 percent, and an expected dividend growth rate of 3 percent. The firm’s price to earnings ratio (P/E) is:

A)   3.33.

B)   2.78.

C)   6.66.

D)   9.00.

The correct answer was A) 

P/E = .5 / (18%-3%) = 3.33.

22.the expected dividend payout ratio of a firm is expected to rise from 50 percent to 55 percent, the cost of equity is expected to increase from 10 percent to 11 percent, and the firm’s growth rate remains at 5 percent, what will happen to the firm’s price-to-equity (P/E) ratio? It will:

A)   increase.

B)   be negative.

C)   be unchanged.

D)   decline.

The correct answer was D)

Payout increases from 50% to 55%, cost of equity increases from 10% to 11%, and dividend growth rate stays at 5%, the P/E will change from 10 to 9.16:

P/E = DPO / (k – 9).

P/E₀ = 0.50 / (0.10 – 0.05) = 10.

P/E₁ = 0.55 / (0.11 – 0.50) = 9.16.

23.tock has a required return of 14% percent, a constant growth rate of 5% and a retention rate of 60%. The firm’s P/E ratio should be:

A)   5.55.

B)   4.44.

C)   6.66.

D)   7.77.

The correct answer was B)

P/E = (1 - RR) / (k - g) = 0.4 / (0.14 - 0.05) = 4.44

24.uming all other factors remain unchanged, which of the following would most likely lead to a decrease in the market P/E ratio?

A)   A rise in the stock risk premium.

B)   A decline in the risk-free rate.

C)   A decline in the rate of inflation.

D)   An increase in the dividend payout ratio.

The correct answer was A)

P/E = (1 - RR)/(k - g)

To lower P/E: RR increases, g decreases and or k increases. Both a decline in the RF rate and a decline in the rate of inflation will reduce k. An increase in the stock's risk premium will increase k.

25. of the following factors affects the firm’s P/E ratio EXCEPT:

A)   the required rate of return.

B)   growth rates of dividends.

C)   expected dividend payout ratio.

D)   the expected interest rate on the bonds of the firm.

The correct answer was D)

The factors that affect the P/E ratio are the same factors that affect the value of a firm in the infinite growth dividend discount model. The expected interest rate on the bonds is not a significant factor affecting the P/E ratio.