Podcast
Questions and Answers
What type of shares are the zero-growth model useful for valuing?
What type of shares are the zero-growth model useful for valuing?
- Preferred shares (correct)
- Bonds
- Common shares
- Warrants
What is the required rate of return for Investor CDE in the zero-growth model illustration?
What is the required rate of return for Investor CDE in the zero-growth model illustration?
- 12%
- 15% (correct)
- 20%
- 10%
What is the primary focus of share valuation techniques?
What is the primary focus of share valuation techniques?
- Identifying the cash flow an investor can receive in the future (correct)
- Determining the market value of a share
- Projecting the profitability of a company
- Analyzing the financial statements of a company
What is the assumption about the growth rate in the constant growth model?
What is the assumption about the growth rate in the constant growth model?
What is the name of the model also known as the constant growth model?
What is the name of the model also known as the constant growth model?
What is the period valuation model used for?
What is the period valuation model used for?
When is the first dividend assumed to be received in the constant growth model?
When is the first dividend assumed to be received in the constant growth model?
What is the discounted cash flow approach based on?
What is the discounted cash flow approach based on?
What is the expected dividend growth rate for Bavarian Sausage in the constant growth model illustration?
What is the expected dividend growth rate for Bavarian Sausage in the constant growth model illustration?
What is the required rate of return on ordinary shares used for in the period valuation model?
What is the required rate of return on ordinary shares used for in the period valuation model?
What is the dividend-based valuation technique used for?
What is the dividend-based valuation technique used for?
What is the value of the shares of Flix Company based on BSA PA's computation?
What is the value of the shares of Flix Company based on BSA PA's computation?
What is the dividend per share for the year 2021?
What is the dividend per share for the year 2021?
What is the limitation of the zero-growth and constant growth model?
What is the limitation of the zero-growth and constant growth model?
What is the fourth step in the variable growth model?
What is the fourth step in the variable growth model?
What is the expected dividend growth rate of Vin Company in the next 3 years?
What is the expected dividend growth rate of Vin Company in the next 3 years?
What is the purpose of the price-earnings ratio?
What is the purpose of the price-earnings ratio?
What is the required return used by Vic in evaluating his investments?
What is the required return used by Vic in evaluating his investments?
What is the price of the stock today if the required return on investment is 14%?
What is the price of the stock today if the required return on investment is 14%?
What is the implied dividend growth rate for Bavarian Sausage if the stock sells for $34.37?
What is the implied dividend growth rate for Bavarian Sausage if the stock sells for $34.37?
If the cost of capital is 10% and the dividend is expected to grow at 3% indefinitely, what is the price of the firm's stock 4 years from today?
If the cost of capital is 10% and the dividend is expected to grow at 3% indefinitely, what is the price of the firm's stock 4 years from today?
If the required return on the stock investment is 14%, what should be the price of the stock in 5 years?
If the required return on the stock investment is 14%, what should be the price of the stock in 5 years?
What is the dividend payment expected next year for Bavarian Sausage?
What is the dividend payment expected next year for Bavarian Sausage?
What is the expected dividend growth rate for Bavarian Sausage?
What is the expected dividend growth rate for Bavarian Sausage?
What is the primary purpose of using the average P/E ratio of an industry?
What is the primary purpose of using the average P/E ratio of an industry?
A high P/E ratio may indicate that the market expects:
A high P/E ratio may indicate that the market expects:
What is a limitation of share valuation models?
What is a limitation of share valuation models?
What happens when companies assume more risks?
What happens when companies assume more risks?
What should investors be wary of when using valuation models?
What should investors be wary of when using valuation models?
What is the formula for calculating the price-to-earnings ratio?
What is the formula for calculating the price-to-earnings ratio?
Flashcards are hidden until you start studying
