1. Which of the following characteristics appeal to so-called value investors?
I and II only
I and III only
I, II and IV only
II, III and IV only
4.5 points
Question 2
1. The most important factors influencing a stock's current price are its past earnings and dividends.
True
False
4.5 points
Question 3
1. The greater the perceived risk of an asset, the lower the expected rate of return.
True
False
4.5 points
Question 4
1. Over the last year, a firm's earnings per share increased from $1.20 to $1.40, its dividends per share increased from $0.50 to $0.60, and its share price increased from $21 to $24. The firm maintained a relative P/E of 1.10 over the entire time period. Given this information, it follows that the
stock experienced an increase in its P/E ratio.
company had a decrease in its dividend payout ratio.
current P/E of the overall market is 26.4.
overall market P/E is declining.
4.5 points
Question 5
1. The value of a stock is a function of
future returns.
historic dividend growth rate.
most recent earnings per share.
past returns.
4.5 points
Question 6
1. The three steps in determining a stock's intrinsic value are
III and IV only
I, II and IV only
I, III and IV only
4.5 points
Question 7
1. The fact that assets are recorded on the balance sheet at historical rather current values prevents the return on assets ratio (ROA) from being distorted by inflation.
True
False
4.5 points
Question 8
1. On March 31, Adolpha, Inc. reported the following information on its financial statements.
What is the available net working capital for Adolpha, Inc.?
-$126,922
-$66,133
$60,789
$936,510
4.5 points
Question 9
1. Ratio analysis is the study of the relationships between various financial statement accounts.
True
False
4.5 points
Question 10
1. Banks can use the times interest earned ratio as a measure of a borrower's ability to repay their loan.
True
False
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