5.Which of the following valuation measures is often used to compare firms that have no earnings?a.Price-to-cash-flow ratiob.P/E ratioc.Price-to-book ratiod.Price-to-sales ratio
6.A firm has a stock price of $54.75 per share. The firm’s earnings are $75 million, and the firm has 20 million shares outstanding. The firm has an ROE of 15% and a plowback of 65%. What is the firm’s PEG ratio?
7.If a firm has a free cash flow equal to $48.54 million, which is expected to grow at 3% forever. What is the total firm value given a WACC of 9.5%?
8.The greatest value to an analyst from calculating a stock’s intrinsic value is ______.
9.Ace Ventura, Inc., has expected earnings of $5 per share for next year. The firm’s ROE is 15%, and its earnings retention ratio is 40%. If the firm’s market capitalization rate is 10%, what is the present value of its growth opportunities?a.$50b.$25c.$100d.$75
10. The free cash flow to the firm is $300 million in perpetuity, the cost of equity equals 14%, and the WACC is 10%. If the market value of the debt is $1 billion, what is the valueof the equity using the free cash flow valuation approach?