2.The individual discount model is considered amongst analysts as most appropriate for share valuation under which of the following situations: A.When valuing shares from the perspective of a small shareholder and dividend payout ratio is fairly constant. B.Under any situation C.When valuing shares from the perspective of an acquiring company and dividend payout ratio is fairly constant. D. When valuing shares from the perspective of a small shareholder and dividend payout ratio varies and is unpredictable. E.None of the options provided. 2. stock     EPS     share price   Growth rate   A            $0.30     $4.80        4% B           $0.40     $5.50        6% C          $0.50     $7.50        7% D         $0.60     $8.00        5% Using the PEG ratio, rank the stocks in order of investment opportunity, the first having the best, the last having the worst. A. C,B,D,A   B. A,D,B,C  C.  C,D,B,A  D. B,D,C,A

Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter13: Valuation: Earnings-based Approach
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2.The individual discount model is considered amongst analysts as most appropriate for share valuation under which of the following situations:

A.When valuing shares from the perspective of a small shareholder and dividend payout ratio is fairly constant.

B.Under any situation

C.When valuing shares from the perspective of an acquiring company and dividend payout ratio is fairly constant.

D. When valuing shares from the perspective of a small shareholder and dividend payout ratio varies and is unpredictable.

E.None of the options provided.

2.

stock     EPS     share price   Growth rate  

A            $0.30     $4.80        4%

B           $0.40     $5.50        6%

C          $0.50     $7.50        7%

D         $0.60     $8.00        5%

Using the PEG ratio, rank the stocks in order of investment opportunity, the first having the best, the last having the worst.

A. C,B,D,A   B. A,D,B,C  C.  C,D,B,A  D. B,D,C,A

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