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26 Cards in this Set
- Front
- Back
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the growth of mature companies is primarily funded by |
reinvesting company earnings |
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the sustainable growth rate represents the ___ rate at which a firm can grow |
maximum, while maintaining a constant debt to equity ratio |
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wilts has earnings per share of 2.98 and dividends per share of .35. what is the firms sustainable rate of growth if its return on assets is 14.6 and its return on equity is 18.2% |
16.06 |
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the sustainable growth rate |
must be moderate over the long term even if it is high in the short term |
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for a firm that repurchases its stock, the dividend discount model might best be applied to the firms |
free cash flows |
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a firm has 120,000 shares of stock outstanding, a sustainable rate of growth of 3.8 and 648,200 in free cash flows. what value would you place on a share of this firms stock if you require a 14% rate of return |
52.96 |
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as a result of its IP Facebook received |
about the maximum value that it could |
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if the general sentiment of investors is pessimistic, stock prices are more apt to |
decline |
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what is the difference between a fundamental analyst and a technical analyst |
a fundamental analyst analyzes information such as earnings and asset values |
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according the the semi strong form of market efficiency, when new information becomes available in the market, the related stock prices will |
accurately and rapidly adjust to include this new information |
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what dividend yield would be reported in the financial press for a tock that currently pays $1 dividend per quarter and the most recent stock price was 40 |
10% |
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which of the following values treats the firm as a going concern |
market value |
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if a stocks PE ratio is 13.6 at a time when earnings are 3 per year and the dividend payout ratio is 40%, what is the stocks current price |
40.50 |
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with respect to the notion that stock prices follow a random walk, several researchers have concluded that |
past stock price changes provide little useful information about current stock prices |
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what is the current price of a share of stock for a firm with 5 million in balance sheet equity, 500,000 shares of stock outstanding, and a price/book value ratio of 4 |
40 |
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a firms liquidation value is the amount |
realized from selling all assets and paying off all creditors |
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which one of the following is least likely to account for an excess of market value over book value of equity |
inaccurate depreciation methods |
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firms with valuable intangible assets are more likely to show an |
high going concern value |
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which of the following is inconsistent with a firm that sells for very near book value |
high future earning power |
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a stock paying $5 in annual dividends currently sells for 80 and has an expected return of 14%. What might investors expect to pay for the stock one year from now |
86.20 |
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a stock currently sells for 50 per share, has an expected return of 15% and an expected capital appreciation rate of 10%. what is the amount of the expected dividend |
2.50 |
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the expected return on a common stock is equal to |
the capital appreciation rate+ dividend yield |
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it is possible to ignore cash dividends that occur far into the future when using a dividend discount model because those dividends |
have an insignificant present value |
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if a dividend yield for year 1 is expected to be 5% based on a stock price of 25. what will the year 4 dividend by if dividends grow annually at a constant rate of 6% |
1.49 |
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danis just paid an annual dividend of 6 per share. what is the dividend expected to be in five years if the the growth rate is 4.2% |
7.37 |
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what would be the approximate expected price of a stock when dividends are expected to grow at a 25% rate for 3 years, then grow at a constant rate of 5%, if the stocks required return is 13% and next years dividend will be 4.00 |
68.64 |
