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NEW QUESTION: 1
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이러한 요구 사항을 충족하고 가장 비용 효율적인 솔루션은 무엇입니까?
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NEW QUESTION: 2
Arnaud Aims is assisting with the analysis of several firms in the retail department store industry. Because one of the industry members, Flavia Stores, has negative earnings for the current year, Aims wishes to normalize earnings to establish more meaningful P/E ratios. For the current year (2008) and six previous years, selected financial data are given below. All data are in euros.
Aims wishes to estimate normalized EPS for 2008 using two different methods, the method of historical average EPS and the method of average rate of return on equity. He will leave 2008 EPS and ROI out of his estimates. Based on his normalized EPS estimates, he will compute a trailing P/E for 2008. The stock price for Flavia Stores is €26.50.
Aims is also looking at price-to-book ratios as an alternative to price-to-earnings ratios. Three of the advantages of P/B ratios that Aims recalls are:
Advantage 1: Because book value is a cumulative balance sheet account encompassing several years, book value is more likely to be positive than EPS.
Advantage 2: For many companies, especially service companies, human capital is more important than physical capital as an operating asset.
Advantage 3: Book value represents the historical purchase cost of assets, as well as accumulated accounting depreciation expenses. Inflation and technological changes can drive a wedge between the book value and market value of assets.
Aims used a constant growth DDM to establish a justified P/E ratio based on forecasted fundamentals.
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Finally, Aims makes two comments to his associate about valuation ratios based on EBITDA and on dividends.
Comment 1: EBITDA is a pre-interest-expense figure, so I prefer a ratio of total equity value to EBITDA over a ratio of enterprise value to EBITDA.
Comment 2: Dividend yields are useful information because they are one component of total return.
However, they can be an incomplete measure of return, as investors trade off future earnings growth to receive higher current dividends.
Which one of the three advantages recalled by Aims most likely represents a good reason to consider using a P/B ratio?
A. Advantage 1.
B. Advantage 2.
C. Advantage 3.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Book values arc more likely to be positive than EPS. Thus, the P/B ratio suffers less often from the problem whete P/E ratios are not meaningful because of a negative EPS. The other two advantages given are actually disadvantages associated with using P/B ratios. (Study Session 12, LOS 42.d,e)
NEW QUESTION: 3
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A. elimination of risk of data corruption
B. lower installation cost
C. centralized management
D. lower cost per terabyte
Answer: C
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