Question 86 There are five firms within an industry with the following market shares: 35%, 2%, 22%, 26%, and 15%. The three-firm concentration ratio and Herfindahl index for this industry are closest to: Concentration Ratio Herfindahl Index A) 83% 0.24 B) 83% 0.26 C) 59% 0.24 D) 59% 0.26
Question 87 Which of the following statements regarding price multiples is most accurate? A) A disadvantage of the price/book value ratio is that it is not an appropriate measure for firms that primarily hold liquid assets. B) A rationale for using the price/cash flow ratio is that there is only one clear definition of cash flow. C) The price/earnings ratio can be useful even if earnings are negative. D) An advantage of the price/sales ratio is that it is meaningful even for distressed firms.
Question 88 An analyst projects the following pro forma financial results for Magic Holdings, Inc., in the next year: ♣ Sales of $1,000,000 ♣ Earnings of $200,000 ♣ Total assets of $750,000 ♣ Equity of $500,000 ♣ Dividend payout ratio of 62.5% ♣ Shares outstanding of 50,000 ♣ Risk free interest rate of 7.5% ♣ Expected market return of 13.0% ♣ Stock Beta at 1.8 If the analyst assumes Magic Holdings, Inc. will produce a constant rate of dividend growth, the value of the stock is closest to: A) $44 B) $23 C) $19 D) $104 Question 89 Which of the following choices is least likely a characteristic of an efficient market? A) Market participants react quickly to news, and these reactions are quickly reflected in prices. B) A large number of participants value securities independent of other parties. C) Expected returns implicitly include a risk component. D) Major news announcements are grouped together to minimize the market impact of any one announcement.
Question 90 Which of the following statements regarding primary and secondary capital markets is least accurate? A) An underwriter provides origination, risk bearing, and distribution services to an issuer. B) Secondary financial markets are markets in which securities trade after their initial public offerings. C) Secondary equity issues are new shares issued by firms whose shares are already publicly traded. D) In continuous markets, bids and offers are accumulated and trades take place at a price that clears the market. | 
发表于 2008-11-6 16:32
| 
