Practice test with answers ch11

Practice test with answers ch11 - Chapter 11 Equity...

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Chapter 11 Equity Analysis and Valuation Multiple Choice Questions 1. Which of the following statements concerning quality of earnings is correct ? A. The more cyclical the industry within which a company operates the lower its quality of earnings, all other things equal B. The smoother the earnings stream of a company, the greater the quality of the earnings C. Quality of earnings is independent of business risk D. Quality of earnings is largely beyond management's control 2. A growing company with disappointing profitability would generally have A. High price/book and high price/earnings B. High price/book and low price/earnings C. Low price/book and high price/earnings D. Low price/book and low price/earnings 3. Variability in earning numbers: A. Is desirable as it increases variance of earnings and hence value of stock options B. Increases if a company increases its operating leverage C. Increases if a company decreases its financial leverage D. Is independent of operating leverage
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This note was uploaded on 02/16/2012 for the course FINA 470 taught by Professor Austin during the Fall '11 term at South Carolina.

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Practice test with answers ch11 - Chapter 11 Equity...

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