CFA一级模块练习-权益投资.docx

全球最大的CFA(特许金融分析师)培训中心 CFA一级模块练习-权益投资1 . One advantage ofusing price-to-book value (PBV) multiples for stock valuation is that: A most of the time itis close to the market value. B)it is a stable andsimple benchmark for comparison to the market price. C)book value of a firmcan never be negative. The correct answer wasB Book value provides arelatively stable measure of value that can be compared to the market price.For investors who mistrust the discounted cash flow estimates of value, itprovides a much simpler benchmark for comparison. Book value may or may not becloser to the market value. A firm may have negative book value if it showsaccounting losses consistently. 2 . The threat ofsubstitute products is most likely to be low for a firm that: A)produces a commodityproduct in an industry with significant unused capacity. B)operates in afragmented market with little unused capacity. C)produces adifferentiated product with high switching costs. The correct answer wasC The threat ofcompetition from substitute products is likely to be low for a firm thatproduces a differentiated product with high switching costs. Unused capacityand low industry concentration (a fragmented market) tend to intensify rivalryamong industry competitors but are not directly related to the threat ofsubstitute products. 3 . Given thefollowing estimated financial results, value the stock of FishnChips, Inc.,using the infinite period dividend discount model (DDM). Sales of $1,000,000. Earnings of $150,000. Total assets of $800,000. Equity of $400,000. Dividend payout ratio of 60.0%. Average shares outstanding of 75,000. Real risk free interest rate of 4.0%. Expected inflation rate of 3.0%. Expected market return of 13.0%. Stock Beta at 2.1. The per share value ofFishnChips stock is approximately: (Note: Carry calculations out to at least 3decimal places.) A)$26.86. B)Unable to calculatestock value because ke ke), investors willlikely prefer that the company retain more earnings. Since an increase in thedividend payout would decrease earnings retention, the P/E ratio would fall, asinvestors will value the company lower if it retains a lower percentage ofearnings.5 . Which of thefollowing is NOT a determinant of the expected price/earnings (P/E) ratio?A)Expected dividendpayout ratio (D/E).B)Average debt tocapital ratio (D/C).C)Expected growth ratein dividends (g).The correct answer wasBThe P/E ratio isdetermined by payout ratio D/E, required return Ke, and expected growth g.1 .Anequity valuation model that values a firm based on the market value of itsoutstanding debt and equity securities, relative to a firm fundamental, isa(n): A)asset-based model. B)enterprise valuemodel. C)market multiplemodel. The correct answer wasB An enterprise valuemodel relates a firms enterprise value (the market value of its outstandingequity and debt securities minus its cash and marketable securities holdings)to its EBITDA, operating earnings, or revenue. 2 . Dividends onnon-participating preference shares are typically: A)a fixed percentageof par value. B)a contractualobligation of the company. C)lower than thedividends on common shares. The correct answer wasA Similar to theinterest payments on a debt security, dividends on non-participating preferenceshares (preferred stock) are typically fixed. Unlike the interest payments on adebt security, the company is not contractually obligated to pay preferreddividends. Preferred dividends are typically higher than a firms commondividends. 3 . A firm has aprofit margin of 10%, an asset turnover of 1.2, an equity multiplier of 1.3,and an earnings retention ratio of 0.5. What is the firms internal growthrate? A)7.8%. B)6.7%. C)4.5%. The correct answer was A ROE = (Net Income /Sales)(Sales / Total Assets)(Total Assets / Total Equity) ROE = (0.1)(1.2)(1.3)= 0.156 g = (retentionratio)(ROE) = 0.5(0.156) = 0.078 or 7.8% 4 . Liquidity ofprivate equity is most likely: A)greater thanliquidity of public equity. B)less than liquidityof public equity. C)about equal toliquidity of public equity. The correct answer wasB Private equitysecurities are not registered to be traded in a public market, and thereforeare less liquid that public equity. 5 . In its latest annualreport, a company reported the following: Net income = $1,000,000 Total equity = $5,000,000 Total assets = $10,000,000 Dividend payout ratio = 40% Based on thesustainable growth model, the most likely forecast of the companys futureearnings growth rate is: A)6%. B)12%. C)8%. The correct answer wasB g = (RR)(ROE) RR = 1 ? dividendpayout ratio = 1 ? 0.4 = 0.6 ROE = NI / TotalEquity = 1,000,000 / 5,000,000 = 1 / 5 = 0.2 Note: This is thesimple calculation of ROE. Since we are only given these inputs,these are what you should use. Also, if given beginning and ending equitybalances, use the average in the denomi