Received b c and e as answers but this is incorrect 4. Among the following statements,...
Received b c and e as answers but this is incorrect 4. Among the following statements, only 3 are correct. Identify which ones. a) The market value of a company depends on its past earnings b) Growth in future earnings has an impact on the value of a company's stock c) Investors are more focused on cash flows than profit when valuing a company's stock d) Qualitative factors may impact the value of a company's stock e) The DCF valuation methodology relies on cash flow forecasts
Homework Answers
Answer:
b) Growth in future earnings has an impact on the value of a company's stock
d) Qualitative factors may impact the value of a company's stock
e)The DCF valuation methodology relies on cash flow forecasts
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Received b c and e as answers but this is incorrect 4. Among the
following statements,...
4. Among the following statements, only 3 are correct. Identify which ones. a) The market value...
4. Among the following statements, only 3 are correct. Identify which ones. a) The market value of a company depends on its past earnings b) Growth in future earnings has an impact on the value of a company's stock c) Investors are more focused on cash flows than profit when valuing a company's stock d) Qualitative factors may impact the value of a company's stock e) The DCF valuation methodology relies on cash flow forecasts
7. Among the following statements about valuation multiple, only 3 are correct. Identify which ones. a) ...
7. Among the following statements about valuation multiple, only 3 are correct. Identify which ones. a) The price earnings ratio analysis compares the enterprise value of a company to its EBITDA b) The price earnings ratio analysis compares the enterprise value of a company to its net income c) The price earnings ratio analysis compares the market value of equity of a company to its net income d) The price earnings ratio analysis compares the share price to the earnings...
5,6,7,8 5. Stock valuation is impacted by 2. Dividends b. The growth rate of dividends c....
5,6,7,8
5. Stock valuation is impacted by 2. Dividends b. The growth rate of dividends c. The risk associated with the firm issuing the stock d. All of the above e. Answers a, b, and c plus for how much you can sell the stock in the future. Inflation, recession, and high interest rates are economic events that are best characterized as being a. systematic risk factors that can be diversified away. b. company-specific risk factors that can be diversified...
Which of the following statements is CORRECT? a. The value of operations of a stock is...
Which of the following statements is CORRECT? a. The value of operations of a stock is the present value of all expected future free cash flows, discounted at the free cash flow growth rate. b. The free cash flow valuation model for constant growth, Vop = FCF1/(WACC - g), can be used to value firms whose free cash flows are expected to decline at a constant rate, i.e., to grow at a negative rate. c. The constant growth model cannot...
Which one of the following factors is not considered calculating a firm’s PEG ratio? Projected growth...
Which one of the following factors is not considered calculating a firm’s PEG ratio? Projected growth rate of the value indicator (e.g., earnings) Ratio of market price to value indicator (e.g., P/E) Share exchange ratio Historical growth rate of the value indicator None of the above 2. In determining the purchase price for an acquisition target, which one of the following valuation methods does not require the addition of a purchase price premium? Discounted cash flow method Comparable companies’ method...
if u answer is 150 million, it’s incorrect answer Example 5.12: A company had total revenues...
if u answer is 150 million, it’s incorrect answer
Example 5.12: A company had total revenues of $200 million, operating profit margin of 20%, and depreciation and amortization expense of $10 million over the trailing twelve months. The company currently has $300 million in total debt and $100 million in cash and cash equivalents. If the company's market capitalization (market value of its equity) is $1 billion, what is its EV/EBITDA ratio? Solution: EBITDA = EBIT + Depreciation & Amortization...
Which of the following statements is CORRECT? a. The current cash flow from existing assets is...
Which of the following statements is CORRECT? a. The current cash flow from existing assets is highly relevant to investors. However, since the value of the firm depends primarily upon its growth opportunities, accounting net income projections from those opportunities are the only relevant future flows with which investors are concerned. b. Interest paid by a corporation is a tax deduction for the paying corporation, but dividends paid are not deductible. This treatment, other things held constant, tends to discourage...
Help with #6? 6. (Equity Valuation Cash Flows] Following are financial statements (historical and forecasted) for...
Help with #6?
6. (Equity Valuation Cash Flows] Following are financial statements (historical and forecasted) for the Global Products Corporation. GLOBAL PRODUCTS CORPORATION BALANCE SHEETS 2016 FORECAST 2017 Cash $ 50,000 $ 60,000 Accounts receivable 200,000 290,000 Inventories 450,000 570,000 Total current assets 700,000 920,000 Fixed assets, net 300,000 380,000 Total assets $1,000,000 $1,300,000 Accounts payable 140,000 180,000 Accruals 50,000 70,000 Bank loan 80,000 90,000 co Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock ($1 par value)...
. QUESTION 4: (a) For each of the statements below, write T (True) or F (False)...
. QUESTION 4: (a) For each of the statements below, write T (True) or F (False) in the answer booklet next to the question number. For the statement which you believe is false, provide reasons why. (1) A firm has positive residual operating income (ROPI) in period t when its forecasted NOPAT in period t exceeds the expected amount computed as net operating assets at the start of period t multiplied by the cost of equity capital. (ii) In a...
please show work and be clear and neat 6. The advantage of the dividend discount model...
please show work and be clear and neat
6. The advantage of the dividend discount model is that: A) It is simple B) Dividends are easily observable C) Capital gains can be earned instead of dividends D) Firms publish their dividend policies E) All of the above 7. Assume that Bank of America Corp. reported a net loss of $584 million for the fiscal quarter. That day, Bank of America's stock price climbed from $16.23 per share to $16.37. This...
5,6,7,8
5. Stock valuation is impacted by 2. Dividends b. The growth rate of dividends c. The risk associated with the firm issuing the stock d. All of the above e. Answers a, b, and c plus for how much you can sell the stock in the future. Inflation, recession, and high interest rates are economic events that are best characterized as being a. systematic risk factors that can be diversified away. b. company-specific risk factors that can be diversified...
if u answer is 150 million, it’s incorrect answer
Example 5.12: A company had total revenues of $200 million, operating profit margin of 20%, and depreciation and amortization expense of $10 million over the trailing twelve months. The company currently has $300 million in total debt and $100 million in cash and cash equivalents. If the company's market capitalization (market value of its equity) is $1 billion, what is its EV/EBITDA ratio? Solution: EBITDA = EBIT + Depreciation & Amortization...
Help with #6?
6. (Equity Valuation Cash Flows] Following are financial statements (historical and forecasted) for the Global Products Corporation. GLOBAL PRODUCTS CORPORATION BALANCE SHEETS 2016 FORECAST 2017 Cash $ 50,000 $ 60,000 Accounts receivable 200,000 290,000 Inventories 450,000 570,000 Total current assets 700,000 920,000 Fixed assets, net 300,000 380,000 Total assets $1,000,000 $1,300,000 Accounts payable 140,000 180,000 Accruals 50,000 70,000 Bank loan 80,000 90,000 co Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock ($1 par value)...
. QUESTION 4: (a) For each of the statements below, write T (True) or F (False) in the answer booklet next to the question number. For the statement which you believe is false, provide reasons why. (1) A firm has positive residual operating income (ROPI) in period t when its forecasted NOPAT in period t exceeds the expected amount computed as net operating assets at the start of period t multiplied by the cost of equity capital. (ii) In a...
please show work and be clear and neat
6. The advantage of the dividend discount model is that: A) It is simple B) Dividends are easily observable C) Capital gains can be earned instead of dividends D) Firms publish their dividend policies E) All of the above 7. Assume that Bank of America Corp. reported a net loss of $584 million for the fiscal quarter. That day, Bank of America's stock price climbed from $16.23 per share to $16.37. This...
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