Suppose that a firm's recent earnings per share and dividends per share are $3.00 and $1.50, respectively. Both are expected to grow at 10 percent. However, the firm's current P/E ratio of 20 seems high for this growth rate. The P/E ratio is expected to fall to 16 within five years. Compute a value for this stock by first estimating the dividends over the next five years and the stock price in five years. Then discount these cash flows using a 14 percent required rate.

If a product goes up in price, and the demand for it drops, that product's demand is a. elastic b. inelastic c. stable d. fixed select the best answer from the choices provided

If the ceo of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager), which of the following situations would be likely to cause the manager to receive a better grade? in all cases, assume that other things are held constant.a. the division's basic earning power ratio is above the average of other firms in its industry.b. the division's total assets turnover ratio is below the average for other firms in its industry.c. the division's debt ratio is above the average for other firms in the industry.d. the division's inventory turnover is 6, whereas the average for its competitors is 8.e. the division's dso (days' sales outstanding) is 40, whereas the average for its competitors is 30.

Which of the following situations is most likely to change a buyer's market into a seller's market? a. a natural disaster that drives away a lot of the population. b. the price of building materials suddenly going up. c. the government buys up a lot of houses to build a new freeway. d. a factory laying off a lot of workers in the area.