Factor analysis can be used in which of the following circumstances?
A) To identify underlying dimensions, or factors, that explain the correlations among a set of variables.
B) To identify a new, smaller set of uncorrelated variables to replace the original set of correlated variables in subsequent multivariate analysis.
C) To identify a smaller set of salient variables from a larger set for use in subsequent multivariate analysis.
D) All are correct circumstances.
D
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Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?
A. Accounts payable. B. Common stock "raised" by reinvesting earnings. C. Common stock raised by new issues. D. Preferred stock. E. Long-term debt.
Identify the financial analysis building block most appropriately associated with each ratio listed below. Each building block may be used more than once.
A. Price Earnings Ratio B. Dividend Yield C. Accounts Receivable Turnover D. Days' Sales in Inventory E. Inventory Turnover F. Return on Total Assets G. Basic Earnings per Share H. Equity Ratio I. Debt Ratio J. Times Interest Earned