Ch12(6e sample - ch12(6e sample 1 In general firms in the semiconductor industry will have a lower than firms in the electric utility industry A

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ch12(6e) sample 1. In general, firms in the semiconductor industry will have a lower _______ than firms in the electric utility industry. A. return on assets B. payout ratio C. growth rate D. none of the above 2. All else the same, a higher plowback ratio means a(n) _______ P/E ratio. A. higher B. lower C. unchanged D. unable to determine 3. New-economy companies generally have higher _______ than old-economy companies. A. book value per share B. P/E multiples C. profits D. all of the above 4. P/E ratios tend to be _______ when inflation is _______. A. higher, higher B. lower, lower C. higher, lower D. they are unrelated
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5. __________ is equal to (the total market value of the firm's common stock/the replacement cost of the firm's assets less its liabilities). A. book value per share B. liquidation value per share C. market value per share D. Tobin's Q 6. __________ are analysts who use information concerning current and prospective profitability of a company to assess its fair market value. A. credit analysts B. fundamental analysts C. systems analysts D. technical analysts 7. An underpriced stock provides an expected return which is _______________ the required return based on the capital asset pricing model (CAPM). A. less than B. equal to C. greater than D. greater than or equal to 8. The constant growth dividend discount model (DDM) is valid only when ____________. A. growth rate is less than or equal to the required return B. growth rate is greater than or equal to the required return C. growth rate is less than the required return D. growth rate is greater than the required return 9. Each of two stocks, A and B, are expected to pay a dividend of $7 in the upcoming year. The expected growth rate of dividends is 6% for both stocks. You require a return of 10% on stock A and a return of 12% on stock B. Using the constant growth DDM, the intrinsic value of stock A __________.
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This note was uploaded on 08/06/2009 for the course BUSINESS 4444 taught by Professor Dr.dale during the Spring '09 term at University of Texas at Dallas, Richardson.

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Ch12(6e sample - ch12(6e sample 1 In general firms in the semiconductor industry will have a lower than firms in the electric utility industry A

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