Wednesday, November 13, 2019

Tobin's Q relates the market value of a firm's assets to which one of the following?

Tobin's Q relates the market value of a firm's assets to which one of the following? 
 
A. 
initial cost of creating the firm

B. 
current book value of the firm

C. 
average asset value of similar firms

D. 
average market value of similar firms

E. 
today's cost to duplicate those assets

 
36.
The price-sales ratio is especially useful when analyzing firms that have which one of the following? 
 
A. 
volatile market prices

B. 
negative earnings

C. 
positive PEG ratios

D. 
a negative Tobin's Q

E. 
increasing sales

 
37.
Shareholders probably have the most interest in which one of the following sets of ratios? 
 
A. 
return on assets and profit margin

B. 
long-term debt and times interest earned

C. 
price-earnings and debt-equity

D. 
market-to-book and times interest earned

E. 
return on equity and price-earnings

 
38.
Which one of the following accurately describes the three parts of the Du Pont identity? 
 
A. 
operating efficiency, equity multiplier, and profitability ratio

B. 
financial leverage, operating efficiency, and profitability ratio

C. 
equity multiplier, profit margin, and total asset turnover

D. 
debt-equity ratio, capital intensity ratio, and profit margin

E. 
return on assets, profit margin, and equity multiplier

 
39.
An increase in which of the following will increase the return on equity, all else constant?

I. sales
II. net income
III. depreciation
IV. total equity 
 
A. 
I only

B. 
I and II only

C. 
II and IV only

D. 
II and III only

E. 
I, II, and III only

 
40.
Which of the following can be used to compute the return on equity?

I. Profit margin × Return on assets
II. Return on assets × Equity multiplier
III. Net income/Total equity
IV. Return on assets × Total asset turnover 
 
A. 
I and III only

B. 
II and III only

C. 
II and IV only

D. 
I, II, and III only

E. 
I, II, III, and IV

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