Assume that Ford and GM are indentical firms. Using the comparable company analysis, which one would appear to be a better stock buy? Firm P/E Ratio Ford 5.2 GM 8.3 a) Ford b) GM
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Assume that Ford and GM are indentical firms. Using the comparable company analysis, which one would appear to be a better stock buy?
| Firm | P/E Ratio | |
| Ford | 5.2 | |
| GM | 8.3 |
a) Ford
b) GM
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- Which of the following variables do Fama and French claim do a better job explaining stock returns than beta? 1. Book-to-market ratio, II. Unexpected change in industrial production, III. Firm size O a. I and II only Ob. I and Ill only OC. I, II, and III O d. I only Not yet answered10.Which of the following statement on stock valuation is incorrect?a.In dividend discount model, the stock value is the present value of all future dividends.b.We may use the dividend discount model to value all firms. c.Enterprise value is the sum of equity and debt minus cash. d.We may use price-earnings ratio to compute the value to comparable firms.FE1 Show your work for problem solving questions. If you use one or more sources of information in preparing any answer, provide an APA-style reference, identify any quoted information, and cite a reference wherever it is used. How would each of the following events change the equilibrium financial market value of a company? (a)an increase in its cost of production; (b) an increase in its cost of financing; (c) an increase in the market’s discount rate; (d) an increase in its sales revenue; and (e) an increase in its projected future profits.
- Which investment below would be most appropriate for investors who need income? A. International stocks B. DOW Index Funf (DIA) C. Disney and Exxom Moble stocks D. Dividend Paying ETFs E. A, B, D are correct F. B,C,D are correct G. All of them are correct42. Which of the two companies gives a better investment: company A with a current market value of P3.55 and P0.72 dividend or company B Soľn: with a current market value of P53.20 and a dividend of P7.32? A. company A B. company B C. both A and B D. none of themАВС XYZ Discount rate (r) Historical growth rate of 0.015+2*0.085=0.185 0.015+1.5*0.085=0.142 (58/30)^(1/30)-1=0.022 Not available. Cannot dividends compute without dividends Sustainable growth rate Fundamental value using dividend growth model with the historical growth rate Fundamental value using the 467*(1+0.185)/(0.185-0.045) dividend growth model with =3953 the sustainable growth rate Fundamental value using residual income growth 0.15*(1-0.7)=0.045 467*(1+0.185)/(0.185-0.022) 0.2*(1-0)=0.2 Not available. Cannot =3395 compute without dividends Not available. Cannot compute without dividends 80*(1+0.022)-(550*0.022)/(0. 185-0.022)=427.36 Not available. Cannot compute without dividends model with the historical growth rate Fundamental value using the 80*(1+0.045)-(550*0.045)/(0. residual income growth 12*(1+0.2)-(100*0.2)/(0.142- 0.2)=96.5 185-0.045)=420.35 model with the sustainable growth rate
- Suppose that in April 2019, Nike Inc. had sales of $36,403 million, EBITDA of $5,214 million, excess cash of $5,245 million, $3,818 million of debt, and 1,583.3 million shares outstanding. a. Using the average enterprise value to sales multiple in the table here,, estimate Nike's share price. b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above? c. Using the average enterprise value to EBITDA multiple in the table above, estimate Nike's share price. d. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in the table above? a. Using the average enterprise value to sales multiple in the table above, estimate Nike's share price. Nike's share price using the average enterprise value to sales multiple will be $ (Round to the nearest cent.) b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples…If the financial markets are competitive and complete, which ones of the following goals of a firm are equivalent? I. Earnings maximization II. Earnings per share maximization III. Share value maximization IV. Maximizing the utility of existing shareholders I and II Il and III II, II and IV IIlI and IVThe table below provides stock market information for three different countries. Country A Perfect Country B semi perfect Country Ce imperfect Buyers and sellers' access to information about companies is a Cost of buying and selling shares Low In your opinion, in which country will the difference between market price and value of share be Moderate< High biggest and which country it will it be smallest? Explain Why.
- The market's reaction to the announcement of a change in the firm's dividend payout is referred to as the:Question 25Answer A. information content effect. B. MM Proposition II. C. MM Proposition I. D. efficient markets hypothesis.Which statement about book value per share (BVPS) is true???A. Market price per share usually approximates BVPS.B. BVPS can be misleading because it is based onhistorical cost.C. Market price per share greater than BVPS is anindication of an overvalued stockD. BVPS is the amount that would be paid to shareholdersif the firm is sold to another firmSuppose that you will predict the share price for X company next year using the present stock price for the same company. This is an example of : Select one: Anchoring The disposition effects Herd Behavior Self-attribution None of the answers are correct Mental Accounting Clear my choice
