Which of the following statements concerning the Price to Cash-Flow approach to stock valuation are true?
I. The Price to Cash-Flow method works just as well for non-dividend paying stocks as it does for dividend-paying stocks.
II. The Price to Cash-Flow calculate s the intrinsic value of a stock as the present value of future cash flows.
III. The Price to Cash-Flow ratio divides the market price of one share of stock by cash flow per share.
IV. The Price to Cash-Flow method does not directly calculate the intrinsic value of a share.
A) I and II only
B) III and IV only
C) I, III and IV only
D) I, II and III only
Answer: C
You might also like to view...
Businesses use _____ to save on travel costs and lodging, car fleets, and the time of highly salaried employees incurred on bringing together employees working in different organizations or at different sites in the same organization.
A. videoconferencing B. access points C. hotspots D. graphic communications
Defective, damaged, or otherwise unsuitable merchandise that is returned to the seller is referred to as purchase allowances by the purchaser
Indicate whether the statement is true or false
The project profitability index and the internal rate of return:
A. will sometimes result in different preference rankings for investment projects. B. are less dependable than net present value in ranking investment projects. C. will always result in the same preference ranking for investment projects. D. are less dependable than the payback method in ranking investment projects.
A firm with a cash conversion cycle of 175 days can stretch its average payment period from 30 days to 45 days. This will result in a/an ________.
A) decrease of 30 days in the cash conversion cycle B) increase of 15 days in the cash conversion cycle C) decrease of 15 days in the cash conversion cycle D) increase of 30 days in the cash conversion cycle