FM F Business valuations

Earnings per share are $0.40 and a suitable P/E ratio is 12. What is the share value?

• 1 $30.00
• 2 $0.48
• 3 $3.33
• 4 $4.80

Which valuation method looks at the value of net assets?

• 1 The P/E method
• 2 The CAPM
• 3 Asset-based valuation
• 4 The dividend valuation model

In the weak form of the efficient market hypothesis, prices reflect:

• 1 All public information
• 2 All information including private
• 3 No information
• 4 Past price information

In the semi-strong form, prices reflect:

• 1 All publicly available information
• 2 Only past prices
• 3 Only private information
• 4 No information

Irredeemable debt pays $6 a year and the required yield is 8 percent. What is its value?

• 1 $48
• 2 $80
• 3 $6
• 4 $75

Which is a use of a business valuation?

• 1 Deciding a price in an acquisition
• 2 Preparing a payroll
• 3 Counting inventory
• 4 Choosing office furniture

Which statement about the EMH is correct?

• 1 Only technical analysis works
• 2 All markets are strong-form efficient
• 3 The strong form says even private information is already in the price
• 4 Prices never change