Exhibit 12.6 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company. \[\begin{array} { l r r } & \text { Year } 2003& \begin{array} { r } \text { Estimated } \\ \text { Year 2004 } \end{array} \\ \hline \text { GDP } & 11,000 \text { Billion } \\ \text { GDP growth } && 3.5 \%\\ \text { Sales per share} &\$ 800 \\ \text { Operating profit margin}&12 \% \\\text { Depreciation/Fixed Assets } && 14 \% \\ \text { Fixed asset turnover } && 2 \\ \text { Interest rate } && 3.5 \% \\ \text { Total asset turnover } && 0.7 \\ \text { Debt/Total assets } && 45 \% \\ \text { Tax rate } && 36 \%\\ \end{array}\] In addition a regression analysis indicates the following relationship between growth in sales per share for MacLog and GDP growth is %$\Delta$ Sales per share = 0.015 + 0.75(%$\Delta$GDP) -Refer to Exhibit 12.6. Obtain an estimate of the per share depreciation charge for the year 2004.

A) $58.31 B) $102.35 C) $53.68 D) $75.93 E) $65.78 A) $58.31 B) $102.35 C) $53.68 D) $75.93 E) $65.78

Exhibit 12.6 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company. \[\begin{array} { l r r } & \text { Year } 2003& \begin{array} { r } \text { Estimated } \\ \text { Year 2004 } \end{array} \\ \hline \text { GDP } & 11,000 \text { Billion } \\ \text { GDP growth } && 3.5 \%\\ \text { Sales per share} &\$ 800 \\ \text { Operating profit margin}&12 \% \\\text { Depreciation/Fixed Assets } && 14 \% \\ \text { Fixed asset turnover } && 2 \\ \text { Interest rate } && 3.5 \% \\ \text { Total asset turnover } && 0.7 \\ \text { Debt/Total assets } && 45 \% \\ \text { Tax rate } && 36 \%\\ \end{array}\] In addition a regression analysis indicates the following relationship between growth in sales per share for MacLog and GDP growth is %$\Delta$ Sales per share = 0.015 + 0.75(%$\Delta$GDP) -Refer to Exhibit 12.6. Calculate the firm's EBT per share for the year 2004.

A) $13.29 B) $27.89 C) $18.75 D) $19.63 E) $22.91 A) $13.29 B) $27.89 C) $18.75 D) $19.63 E) $22.91

Exam 12: Macroanalysis and Microvaluation of the Stock Market

The dividend payout ratio, the required rate of return on common equity, and the expected growth rate of stock dividends are the major variables that affect

(Multiple Choice)

4.8/5

(41)

Question 101

Excess liquidity is defined as

(Multiple Choice)

4.8/5

(39)

Question 102

If a diffusion index for new orders went from 87 to 74 and then to 68, it would indicate receipt of new orders and indicate a in breadth and the possibility of a future in the series.

(Multiple Choice)

4.8/5

(41)

Question 103

It is important to analyze the economies and security markets before analyzing alternative industries or companies.

(True/False)

4.8/5

(38)

Question 104

The growth rate will most likely increase if the:

(Multiple Choice)

4.7/5

(36)

Question 105

There are three techniques available to help an investor make a market decision. Which of the following is not such an analysis technique?

(Multiple Choice)

4.8/5

(41)

Question 106

Exhibit 12.5 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) An analyst wishes to estimate the share price for Ashley Corporation. The following information is made available: Estimated profit margin = 15% Total asset turnover = 2 Financial leverage = 1.2 Estimated dividend payout ratio = 75% Required rate of return = 14% Estimated EPS = $2.50 -Refer to Exhibit 12.5. The firm's sustainable growth rate is

(Multiple Choice)

4.8/5

(29)

Question 107

Exhibit 12.6 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company. Year 2003 Estimated Year 2004 GDP 11,000 Billion GDP growth 3.5\% Sales per share \ 800 Operating profit margin 12\% Depreciation/Fixed Assets 14\% Fixed asset turnover 2 Interest rate 3.5\% Total asset turnover 0.7 Debt/Total assets 45\% Tax rate 36\% In addition a regression analysis indicates the following relationship between growth in sales per share for MacLog and GDP growth is % $\Delta$ Sales per share = 0.015 + 0.75(% $\Delta$ GDP) -Refer to Exhibit 12.6. Obtain an estimate of the per share depreciation charge for the year 2004.

(Multiple Choice)

4.9/5

(37)

Question 108

Expected earnings per share estimates requires all of the following except

(Multiple Choice)

4.8/5

(32)

Question 109

Exhibit 12.3 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Assume that the dividend payout ratio will be 55 percent when the rate on long-term government bonds falls to 9 percent. Since investors are becoming more risk averse, the equity risk premium will rise to 8 percent and investors will require a 7 percent return. The return on equity will be 13 percent. -Refer to Exhibit 12.3. What is the expected sustainable growth rate?

(Multiple Choice)

4.7/5

(46)

Question 110

Dividend growth is positively related to the return on equity.

(True/False)

4.8/5

(38)

Question 111

If interest rates rise due to inflation, and expected cash flows to a firm rise, then you would expect stock prices to

(Multiple Choice)

4.7/5

(39)

Question 112

Exhibit 12.6 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company. Year 2003 Estimated Year 2004 GDP 11,000 Billion GDP growth 3.5\% Sales per share \ 800 Operating profit margin 12\% Depreciation/Fixed Assets 14\% Fixed asset turnover 2 Interest rate 3.5\% Total asset turnover 0.7 Debt/Total assets 45\% Tax rate 36\% In addition a regression analysis indicates the following relationship between growth in sales per share for MacLog and GDP growth is % $\Delta$ Sales per share = 0.015 + 0.75(% $\Delta$ GDP) -Refer to Exhibit 12.6. Calculate the firm's EBT per share for the year 2004.

(Multiple Choice)

5.0/5

(39)

Question 113

Which of the following economic series are included in the NBER lagging indicator series?

(Multiple Choice)

4.8/5

(39)

Question 114

A microeconomic estimate of the market earnings multiple requires an estimate for which of the following variables?

(Multiple Choice)

4.8/5

(39)

Question 115

Unit labor costs, the rate of inflation, the level of foreign competition, and the capacity utilization rate were variables tested by Finkel and Tuttle as determinants of the

(Multiple Choice)

4.9/5

(33)

Question 116

If, for the S&P Industrials Index, the profit margin was .25 and the equity turnover ratio was 12, the ROE would be:

(Multiple Choice)

4.9/5

(36)

Question 117

The economy and the stock market have a strong, consistent relationship, but the stock market generally turns before the economy does.

(True/False)

4.8/5

(35)

Question 118

Exhibit 12.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) You are using the free cash flow to equity (FCFE) technique to analyze U.S. equity market. The beginning FCFE is $90 and the required rate of return is 10%. Free cash flows are expected to grow at a 10% rate for the next two years and then grow at a constant rate of 7% forever. -Refer to Exhibit 12.7. What is the estimated value of the U.S. market today using the FCFE approach?

(Multiple Choice)

4.9/5

(35)

Question 119

Showing 101 - 119 of 119

The dividend payout ratio, the required rate of return on common equity, and the expected growth rate of stock dividends are the major variables that affect

Excess liquidity is defined as

If a diffusion index for new orders went from 87 to 74 and then to 68, it would indicate receipt of new orders and indicate a in breadth and the possibility of a future in the series.

It is important to analyze the economies and security markets before analyzing alternative industries or companies.

The growth rate will most likely increase if the:

There are three techniques available to help an investor make a market decision. Which of the following is not such an analysis technique?

Expected earnings per share estimates requires all of the following except

Dividend growth is positively related to the return on equity.

If interest rates rise due to inflation, and expected cash flows to a firm rise, then you would expect stock prices to

Which of the following economic series are included in the NBER lagging indicator series?

A microeconomic estimate of the market earnings multiple requires an estimate for which of the following variables?

Unit labor costs, the rate of inflation, the level of foreign competition, and the capacity utilization rate were variables tested by Finkel and Tuttle as determinants of the

If, for the S&P Industrials Index, the profit margin was .25 and the equity turnover ratio was 12, the ROE would be:

The economy and the stock market have a strong, consistent relationship, but the stock market generally turns before the economy does.

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

Introduction to Security Valuation

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 12: Macroanalysis and Microvaluation of the Stock Market

The dividend payout ratio, the required rate of return on common equity, and the expected growth rate of stock dividends are the major variables that affect

Excess liquidity is defined as

If a diffusion index for new orders went from 87 to 74 and then to 68, it would indicate ____ receipt of new orders and indicate a ____ in breadth and the possibility of a future ____ in the series.

It is important to analyze the economies and security markets before analyzing alternative industries or companies.

The growth rate will most likely increase if the:

There are three techniques available to help an investor make a market decision. Which of the following is not such an analysis technique?

Expected earnings per share estimates requires all of the following except

Dividend growth is positively related to the return on equity.

If interest rates rise due to inflation, and expected cash flows to a firm rise, then you would expect stock prices to

Which of the following economic series are included in the NBER lagging indicator series?

A microeconomic estimate of the market earnings multiple requires an estimate for which of the following variables?

Unit labor costs, the rate of inflation, the level of foreign competition, and the capacity utilization rate were variables tested by Finkel and Tuttle as determinants of the

If, for the S&P Industrials Index, the profit margin was .25 and the equity turnover ratio was 12, the ROE would be:

The economy and the stock market have a strong, consistent relationship, but the stock market generally turns before the economy does.

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

Introduction to Security Valuation

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

If a diffusion index for new orders went from 87 to 74 and then to 68, it would indicate receipt of new orders and indicate a in breadth and the possibility of a future in the series.