[CFA模拟真题] 2006 CFA Level I －NO44 face, required, company, related, likely

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44. A company's return on equity is greater than its required rate of return on equity. The earnings multiplier (P/E) for that company's common stock is most likely to be positively related to the:

Select exactly 1 answers from the following:
A. market risk premium.
B. risk-free rate of return.
C. company's earnings retention ratio.
D. stock's Capital Asset Pricing Model beta.
答案和详解如下！
Feedback: Correct answer: C

 

Investment Analysis and Portfolio Management, 7th edition, Frank K. Reilly and Keith C. Brown (Dryden, 2003), pp. 388?91, 399

2006 Modular Level I, Vol. III, pp. 365-367, 376-377

Study Session 13-55-d

show how to use the DDM to develop an earnings multiplier model, and explain the factors in the DDM that affect a stock抯 price-to-earnings (P/E) ratio

 

All else equal, the higher the earnings retention ratio, the higher the company抯 growth rate. The higher the growth rate, the higher the company抯 earnings multiplier.