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Chipotle Mexican Grill Stock Split Quiz

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Questions and Answers

What valuation metric is used to assess how much investors pay for a company's earnings growth?

Price-to-earnings growth (PEG) ratio (correct)

Forward P/E ratio

Return on investment (ROI) ratio

Price-to-sales ratio

Why does the author consider Chipotle stock unreasonably expensive?

Low growth potential

Stagnant earnings

High PEG ratio (correct)

Lack of store expansion

What do steady share repurchases by Chipotle contribute to in terms of growth?

Decrease in number of stores

Decrease in earnings

Increase in shareholder dividends

Increase in long-term earnings growth (correct)

Based on the content, why does the author advise being patient with Chipotle stock?

To wait for a better buying opportunity Signup and view all the answers

What hypothetical conditions would make Chipotle stock a buy according to the author?

$53 earnings per share and trading at 30 times earnings Signup and view all the answers

What is the author recommending regarding investing in Chipotle Mexican Grill at the moment?

Wait for a better buying opportunity Signup and view all the answers

What is the purpose of Chipotle's 50-to-1 stock split?

To make it easier for investors to accumulate shares of the stock Signup and view all the answers

How will Chipotle's current share price of $2,880 be affected by the 50-to-1 stock split?

The share price will decrease to $57.60 Signup and view all the answers

Why do company employees typically like stock splits?

It makes it easier for them to sell the equity they've acquired working for the company Signup and view all the answers

How does a stock split impact a company's fundamental valuation?

It has no impact on the company's fundamental valuation Signup and view all the answers

What is the author's stance on Chipotle's stock split?

The author is neutral on Chipotle's stock split Signup and view all the answers

What is the key reason why investors like stock splits?

It makes it easier for them to accumulate shares of the stock Signup and view all the answers