Question 1

Growth rates of the (1) labor force, (2) average number of hours worked and (3) labor productivity are the main determinants of a foreign country's

Accepted Answer

A) Dividend payout ratio. 
B) Beta. 
C) Real risk free rate. 
D) Nominal risk free rate. 
E) Risk premium. 
A) Dividend payout ratio. 
B) Beta. 
C) Real risk free rate. 
D) Nominal risk free rate. 
E) Risk premium.

Question 2

Exhibit 12.9
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The aggregate market currently has a retention ratio of 60 percent, a required rate of return of 12 percent, and an expected growth rate for dividends of 4 percent.
-Growth companies are those firms that consistently earn higher rates of return by assuming greater amounts of risk.

Accepted Answer

A) True 
 B)False

Question 3

The infinite period dividend discount model (DDM) can be used to value a supernormal growth company.

Accepted Answer

A) True 
 B)False

Question 4

Using the constant growth model, an increase in the required rate of return from 17 to 20 percent combined with an increase in the growth rate from 8 to 11 percent would cause the price to

Accepted Answer

A) Rise more than 3% 
B) Rise less than 3%. 
C) Remain constant. 
D) Fall more than 3%. 
E) Fall less than 3%. 
A) Rise more than 3% 
B) Rise less than 3%. 
C) Remain constant. 
D) Fall more than 3%. 
E) Fall less than 3%.

Question 5

Exhibit 12.9
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The aggregate market currently has a retention ratio of 60 percent, a required rate of return of 12 percent, and an expected growth rate for dividends of 4 percent.
-The importance of an industry's performance on an individual stock's performance varies across industries.

Accepted Answer

A) True 
 B)False

Question 6

The most appropriate discount rate to use when applying the Operating Free Cash Flows model is the firm's

Accepted Answer

A) Required rate of return based on the capital asset pricing model (CAPM) 
B) Required rate of return based on the dividend discount model (DDM) 
C) Weighted average cost of capital (WAC
C)  
D) Historical cost of debt and equity 
E) All of the above are appropriate depending on the situation 
A) Required rate of return based on the capital asset pricing model (CAPM) 
B) Required rate of return based on the dividend discount model (DDM) 
C) Weighted average cost of capital (WAC
C)  
D) Historical cost of debt and equity 
E) All of the above are appropriate depending on the situation

Growth rates of the (1) labor force, (2) average number of hours worked and (3) labor productivity are the main determinants of a foreign country's

The infinite period dividend discount model (DDM) can be used to value a supernormal growth company.

Using the constant growth model, an increase in the required rate of return from 17 to 20 percent combined with an increase in the growth rate from 8 to 11 percent would cause the price to

The most appropriate discount rate to use when applying the Operating Free Cash Flows model is the firm's

The Investment Setting

The Asset Allocation Decision

Selecting Investments in a Global Market

Organization and Functioning of Securities Markets

Security-Market Indexes

Efficient Capital Markets

An Introduction to Portfolio Management

An Introduction to Asset Pricing Models

Multifactor Models of Risk and Return

Analysis of Financial Statements

Macroanalysis and Microvaluation of the Stock Market

Industry Analysis

Company Analysis and Stock Valuation

Technical Analysis

Equity Portfolio Management Strategies

Bond Fundamentals

The Analysis and Valuation of Bonds

Bond Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward and Futures Contracts

Option Contracts

Swap Contracts, Convertible Securities, and Other Embedded Derivatives

Professional Money Management, Alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Filters

Exam 11: Introduction to Security Valuation

Growth rates of the (1) labor force, (2) average number of hours worked and (3) labor productivity are the main determinants of a foreign country's

The infinite period dividend discount model (DDM) can be used to value a supernormal growth company.

Using the constant growth model, an increase in the required rate of return from 17 to 20 percent combined with an increase in the growth rate from 8 to 11 percent would cause the price to

The most appropriate discount rate to use when applying the Operating Free Cash Flows model is the firm's

The Investment Setting

The Asset Allocation Decision

Selecting Investments in a Global Market

Organization and Functioning of Securities Markets

Security-Market Indexes

Efficient Capital Markets

An Introduction to Portfolio Management

An Introduction to Asset Pricing Models

Multifactor Models of Risk and Return

Analysis of Financial Statements

Macroanalysis and Microvaluation of the Stock Market

Industry Analysis

Company Analysis and Stock Valuation

Technical Analysis

Equity Portfolio Management Strategies

Bond Fundamentals

The Analysis and Valuation of Bonds

Bond Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward and Futures Contracts

Option Contracts

Swap Contracts, Convertible Securities, and Other Embedded Derivatives

Professional Money Management, Alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Filters