CFA一級(jí)Equity部分-Reading38課后習(xí)題及答案

CFA一級(jí)Equity部分-Reading38課后習(xí)題及答案Reading38EquityValuation:ConceptsandBasicTools1Ananalystestimatestheintrinsicvalueofastocktobeintherangeof€17.85to€21.45.Thecurrentmarketpriceofthestockis€24.35.Thisstockismostlikely:Aovervalued.Bundervalued.Cfairlyvalued.SOLUTIONS:1Aiscorrect.Thecurrentmarketpriceofthestockexceedstheupperboundoftheanalyst’sestimateoftheintrinsicvalueofthestock.2Ananalystdeterminestheintrinsicvalueofanequitysecuritytobeequalto$55.Ifthecurrentpriceis$47,theequityismostlikely:Aundervalued.Bfairlyvalued.Covervalued.SOLUTIONS:2Aiscorrect.Themarketpriceislessthantheestimatedintrinsic,orfundamental,value.3Inasset-basedvaluationmodels,theintrinsicvalueofacommonshareofstockisbasedonthe:Aestimatedmarketvalueofthecompany’sassets.Bestimatedmarketvalueofthecompany’sassetsplusliabilities.Cestimatedmarketvalueofthecompany’sassetsminusliabilities.SOLUTIONS:3Ciscorrect.Asset-basedvaluationmodelscalculatetheintrinsicvalueofequitybysubtractingliabilitiesfromthemarketvalueofassets.----------------------------筆記---------------------------FromEquity-Reading38-P365Asset-basedvaluationmodels.Thesemodelsestimateintrinsicvalueofacommonsharefromtheestimatedvalueoftheassetsofacorporationminustheestimatedvalueofitsliabilitiesandpreferredshares.Theestimatedmarketvalueoftheassetsisoftendeterminedbymakingadjustmentstothebookvalue(synonym:carryingvalue)ofassetsandliabilities.4Whichofthefollowingismostlikelyusedinapresentvaluemodel?AEnterprisevalue.BPricetofreecashflow.CFreecashflowtoequity.SOLUTIONS:4Ciscorrect.FCFEcanbeusedinaformofpresentvalue,ordiscountedcashflow,model.BothEVandpricetofreecashflowareformsofmultipliermodels.----------------------------筆記---------------------------FromEquity-Reading38-P365Presentvaluemodels(synonym:discountedcashflowmodels).Thesemodelsestimatetheintrinsicvalueofasecurityasthepresentvalueofthefuturebenefitsexpectedtobereceivedfromthesecurity.Inpresentvaluemodels,benefitsareoftendefinedintermsofcashexpectedtobedistributedtoshareholders(dividenddiscountmodels)orintermsofcashflowsavailabletobedistributedtoshareholdersaftermeetingcapitalexpenditureandworkingcapitalneeds(free-cash-flow-to-equitymodels).Manymodelsfallwithinthiscategory,rangingfromtherelativelysimpletotheverycomplex.InSections4–8,wediscussindetailtwoofthesimplermodels,theGordon(constant)growthmodelandthetwo-stagedividenddiscountmodels.Multipliermodels(synonym:marketmultiplemodels).Thesemodelsarebasedchieflyonsharepricemultiplesorenterprisevaluemultiples.Theformermodelestimatesintrinsicvalueofacommonsharefromapricemultipleforsomefundamentalvariable,suchasrevenues,earnings,cashflows,orbookvalue.Examplesofthemultiplesincludepricetoearnings(P/E,sharepricedividedbyearningspershare)andpricetosales(P/S,sharepricedividedbysalespershare).Thefundamentalvariablemaybestatedonaforwardbasis(e.g.,forecastedEPSforthenextyear)oratrailingbasis(e.g.,EPSforthepastyear),aslongastheusageisconsistentacrosscompaniesbeingexamined.Pricemultiplesarealsousedtocomparerelativevalues.TheuseoftheratioofsharepricetoEPS—thatis,theP/Emultiple—tojudgerelativevalueisanexampleofthisapproachtoequityvaluation.Enterprisevalue(EV)multipleshavetheform(Enterprisevalue)/(Valueofafundamentalvariable).Twopossiblechoicesforthedenominatorareearningsbeforeinterest,taxes,depreciation,andamortization(EBITDA)andtotalrevenue.Enterprisevalue,thenumerator,isameasureofacompany’stotalmarketvaluefromwhichcashandshort-terminvestmentshavebeensubtracted(becauseanacquirercouldusethoseassetstopayforacquiringthecompany).AnestimateofcommonsharevaluecanbecalculatedindirectlyfromtheEVmultiple;thevalueofliabilitiesandpreferredsharescanbesubtractedfromtheEVtoarriveatthevalueofcommonequity.5Bookvalueisleastlikelytobeconsideredwhenusing:Aamultipliermodel.Banasset-basedvaluationmodel.Capresentvaluemodel.SOLUTIONS:5Ciscorrect.Multipliervaluationmodels(intheformofP/B)andasset-basedvaluationmodels(intheformofadjustmentstobookvalue)usebookvalue,whereaspresentvaluemodelstypicallydiscountfutureexpectedcashflows.6Ananalystisattemptingtocalculatetheintrinsicvalueofacompanyandhasgatheredthefollowingcompanydata:EBITDA,totalmarketvalue,andmarketvalueofcashandshort-terminvestments,liabilities,andpreferredshares.Theanalystisleastlikelytouse:Aamultipliermodel.Badiscountedcashflowmodel.Canasset-basedvaluationmodel.SOLUTIONS:6Biscorrect.Touseadiscountedcashflowmodel,theanalystwillrequireFCFEordividenddata.Inaddition,theanalystwillneeddatatocalculateanappropriatediscountrate.7Ananalystwhobasesthecalculationofintrinsicvalueondividend-payingcapacityratherthanexpecteddividendswillmostlikelyusethe:Adividenddiscountmodel.Bfreecashflowtoequitymodel.Ccashflowfromoperationsmodel.SOLUTIONS:7Biscorrect.TheFCFEmodelassumesthatdividend-payingcapacityisreflectedinFCFE.----------------------------筆記---------------------------FromEquity-Reading38-P369theDDMexpressionfortheintrinsicvalueofashareisEquation

1:where V0=valueofashareofstocktoday,att=0 Dt=expecteddividendinyeart,assumedtobepaidattheendoftheyear r=requiredrateofreturnonthestockwefindthevaluefornholdingperiodsisthepresentvalueoftheexpecteddividendsforthenperiodsplusthepresentvalueoftheexpectedpriceinnperiods:----------------------------筆記---------------------------FromEquity-Reading38-P371Inpractice,manyanalystsprefertouseafree-cash-flow-to-equity(FCFE)valuationmodel.Theseanalystsassumethatdividend-payingcapacityshouldbereflectedinthecashflowestimatesratherthanexpecteddividends.FCFEisameasureofdividendpayingcapacity.AnalystsmayalsouseFCFEvaluationmodelsforanon-dividendpayingstock.ThecalculationofFCFEstartswiththecalculationofcashflowfromoperations(CFO).CFOissimplydefinedasnetincomeplusnon-cashexpensesminusinvestmentinworkingcapital.FCFEisameasureofcashflowgeneratedinaperiodthatisavailablefordistributiontocommonshareholders.Whatdoes“availablefordistribution”mean?TheentireCFOisnotavailablefordistribution;theportionoftheCFOneededforfixedcapitalinvestment(FCInv)duringtheperiodtomaintainthevalueofthecompanyasagoingconcernisnotviewedasavailablefordistributiontocommonshareholders.Netamountsborrowed(borrowingsminusrepayments)areconsideredtobeavailablefordistributiontocommonshareholders.Thus,FCFEcanbeexpressedasFCFE=CFO–FCInv+NetborrowingTheinformationneededtocalculatehistoricalFCFEisavailablefromacompany’sstatementofcashflowsandfinancialdisclosures.Frequently,undertheassumptionthatmanagementisactingintheinterestofmaintainingthevalueofthecompanyasagoingconcern,reportedcapitalexpenditureistakentorepresentFCInv.AnalystsmustmakeprojectionsoffinancialstoforecastfutureFCFE.ValuationobtainedbyusingFCFEinvolvesdiscountingexpectedfutureFCFEbytherequiredrateofreturnonequity;theexpressionparallelsEquation

1:8Aninvestorexpectstopurchasesharesofcommonstocktodayandsellthemaftertwoyears.Theinvestorhasestimateddividendsforthenexttwoyears,D1andD2,andthesellingpriceofthestocktwoyearsfromnow,P2.Accordingtothedividenddiscountmodel,theintrinsicvalueofthestocktodayisthepresentvalueof:Anextyear’sdividend,D1.Bfutureexpecteddividends,D1andD2.Cfutureexpecteddividendsandprice—D1,D2andP2.SOLUTIONS:8Ciscorrect.Accordingtothedividenddiscountmodel,theintrinsicvalueofastocktodayisthepresentvalueofallfuturedividends.Inthiscase,theintrinsicvalueisthepresentvalueofD1,D2,andP2.NotethatP2isthepresentvalueatPeriod2ofallfuturedividendsfromPeriod3toinfinity.9Inthefreecashflowtoequity(FCFE)model,theintrinsicvalueofashareofstockiscalculatedas:AthepresentvalueoffutureexpectedFCFE.BthepresentvalueoffutureexpectedFCFEplusnetborrowing.CthepresentvalueoffutureexpectedFCFEminusfixedcapitalinvestment.SOLUTIONS:9Aiscorrect.IntheFCFEmodel,theintrinsicvalueofstockiscalculatedbydiscountingexpectedfutureFCFEtopresentvalue.Nofurtheradjustmentsarerequired.10Withrespecttopresentvaluemodels,whichofthefollowingstatementsismostaccurate?APresentvaluemodelscanbeusedonlyifastockpaysadividend.BPresentvaluemodelscanbeusedonlyifastockpaysadividendorisexpectedtopayadividend.CPresentvaluemodelscanbeusedforstocksthatcurrentlypayadividend,areexpectedtopayadividend,orarenotexpectedtopayadividend.SOLUTIONS:10Ciscorrect.Dividenddiscountmodelscanbeusedforastockthatpaysacurrentdividendorastockthatisexpectedtopayadividend.FCFEcanbeusedforbothofthosestocksandforstocksthatdonot,orarenotexpectedto,paydividendsinthenearfuture.Bothofthesemodelsareformsofpresentvaluemodels.11ACanadianlifeinsurancecompanyhasanissueof4.80percent,$25parvalue,perpetual,non-convertible,non-callablepreferredsharesoutstanding.Therequiredrateofreturnonsimilarissuesis4.49percent.Theintrinsicvalueofapreferredshareisclosestto:A$25.00.B$26.75.C$28.50.SOLUTIONS:11Biscorrect.Theexpectedannualdividendis4.80%×$25=$1.20.Thevalueofapreferredshareis$1.20/0.0449=$26.73.12Twoanalystsestimatingthevalueofanon-convertible,non-callable,perpetualpreferredstockwithaconstantdividendarriveatdifferentestimatedvalues.Themostlikelyreasonforthedifferenceisthattheanalystsuseddifferent:Atimehorizons.Brequiredratesofreturn.Cestimateddividendgrowthrates.SOLUTIONS:12Biscorrect.Therequiredrateofreturn,r,canvarywidelydependingontheinputsandisnotunique.Apreferredstockwithaconstantdividendwouldnothaveagrowthratetoestimate,andtheinvestor’stimehorizonwouldhavenoeffectonthecalculationofintrinsicvalue.13TheBeasleyCorporationhasjustpaidadividendof$1.75pershare.Iftherequiredrateofreturnis12.3percentperyearanddividendsareexpectedtogrowindefinitelyataconstantrateof9.2percentperyear,theintrinsicvalueofBeasleyCorporationstockisclosestto:A$15.54.B$56.45.C$61.65.SOLUTIONS:13Ciscorrect.P0=D1/(r–g)=1.75(1.092)/(0.123–0.092)=$61.65.----------------------------筆記---------------------------FromEquity-Reading38-P375TheGordon(constant)growthmodel(Gordon,1962)isasimpleandwell-recognizedDDM.Themodelassumesdividendsgrowindefinitelyataconstantrate.Becauseofitsassumptionofaconstantgrowthrate,theGordongrowthmodelisparticularlyappropriateforvaluingtheequityofdividend-payingcompaniesthatarerelativelyinsensitivetothebusinesscycleandinamaturegrowthphase.Ifrequiredreturnrisassumedtobestrictlygreaterthangrowthrateg,thenthesquare-bracketedterminEquation

8isaninfinitegeometricseriesandsumsto[(1

+g)/(r–g)].SubstitutingintoEquation

8producestheGordongrowthmodelaspresentedinEquation.TheGordongrowthmodelestimatesintrinsicvalueasthepresentvalueofagrowingperpetuity.Ifthegrowthrate,g,isassumedtobezero,Equation

8reducestotheexpressionforthepresentvalueofaperpetuity.Inestimatingalong-termgrowthrate,analystsuseavarietyofmethods,includingassessingthegrowthindividendsorearningsovertime,usingtheindustrymediangrowthrate,andusingtherelationshipshowninEquation

10toestimatethesustainablegrowthrate:TheGordongrowthmodelestimateofintrinsicvalueisextremelysensitivetothechoiceofrequiredrateofreturnrandgrowthrateg.Notethatnovalueisshownwhenthegrowthrateexceedstherequiredrateofreturn.TheGordongrowthmodelassumesthatthegrowthratecannotbegreaterthantherequiredrateofreturn.TheassumptionsoftheGordonmodelareasfollows:Dividendsarethecorrectmetrictouseforvaluationpurposes.Thedividendgrowthrateisforever:Itisperpetualandneverchanges.Therequiredrateofreturnisalsoconstantovertime.Thedividendgrowthrateisstrictlylessthantherequiredrateofreturn.ApplyingaDDMisdifficultifthecompanybeinganalyzedisnotcurrentlypayingadividend.14Aninvestorisconsideringthepurchaseofacommonstockwitha$2.00annualdividend.Thedividendisexpectedtogrowatarateof4percentannually.Iftheinvestor’srequiredrateofreturnis7percent,theintrinsicvalueofthestockisclosestto:A$50.00.B$66.67.C$69.33.SOLUTIONS:14Ciscorrect.AccordingtotheGordongrowthmodel,V0=D1/(r–g).Inthiscase,D1=$2.00×1.04=$2.08,soV0=$2.08/(0.07–0.04)=$69.3333=$69.33.15Ananalystgathersorestimatesthefollowinginformationaboutastock:Basedonadividenddiscountmodel,thestockismostlikely:Aundervalued.Bfairlyvalued.Covervalued.SOLUTIONS:15Aiscorrect.Thecurrentpriceof€22.56islessthantheintrinsicvalue(V0)of€24.64;therefore,thestockappearstobecurrentlyundervalued.Accordingtothetwo-stagedividenddiscountmodel:----------------------------筆記---------------------------FromEquity-Reading38-P380Multistagegrowthmodelsareoftenusedtomodelrapidlygrowingcompanies.Thetwo-stageDDMassumesthatatsomepointthecompanywillbegintopaydividendsthatgrowataconstantrate,butpriortothattimethecompanywillpaydividendsthataregrowingatahigherratethancanbesustainedinthelongrun.Thatis,thecompanyisassumedtoexperienceaninitial,finiteperiodofhighgrowth,perhapspriortotheentryofcompetitors,followedbyaninfiniteperiodofsustainablegrowth.Thetwo-stageDDMthusmakesuseoftwogrowthrates:ahighgrowthrateforaninitial,finiteperiodfollowedbyalower,sustainablegrowthrateintoperpetuity.TheGordongrowthmodelisusedtoestimateaterminalvalueattimenthatreflectsthepresentvalueattimenofthedividendsreceivedduringthesustainablegrowthperiod.Equation

11willbeusedhereasthestartingpointforatwo-stagevaluationmodel.Thetwo-stagevaluationmodelissimilartoExample

8exceptthatinsteadofassumingzerodividendsfortheinitialperiod,theanalystassumesthatdividendswillexhibitahighrateofgrowthduringtheinitialperiod.Equation

11valuesthedividendsovertheshort-termperiodofhighgrowthandtheterminalvalueattheendoftheperiodofhighgrowth.Theshort-termgrowthrate,gS,lastsfornyears.Theintrinsicvaluepershareinyearn,Vn,representstheyearnvalueofthedividendsreceivedduringthesustainablegrowthperiodortheterminalvalueattimen.VncanbeestimatedbyusingtheGordongrowthmodelasshowninEquation

12,wheregListhelong-termorsustainablegrowthrate.Thedividendinyearn+1,Dn+1,canbedeterminedbyusingEquation

13:TheDDMcanbeextendedtoasmanystagesasdeemedappropriate.Formostpubliclytradedcompanies(thatis,companiesbeyondthestart-upstage),practitionersassumegrowthwillultimatelyfallintothreestages:1)growth,2)transition,and3)maturity.Thisassumptionsupportstheuseofathree-stageDDM,whichmakesuseofthreegrowthrates:ahighgrowthrateforaninitialfiniteperiod,followedbyalowergrowthrateforafinitesecondperiod,followedbyalower,sustainablegrowthrateintoperpetuity.Onecanmakethecasethatathree-stageDDMwouldbemostappropriateforafairlyyoungcompany,onethatisjustenteringthegrowthphase.Thetwo-stageDDMwouldbeappropriatetoestimatethevalueofanoldercompanythathasalreadymovedthroughitsgrowthphaseandiscurrentlyinthetransitionphase(aperiodwithahighergrowthratethanthesustainablegrowthrate)priortomovingtothematurityphase(theperiodwithalower,sustainablegrowthrate).16AnanalystisattemptingtovaluesharesoftheDominionCompany.Thecompanyhasjustpaidadividendof$0.58pershare.Dividendsareexpectedtogrowby20percentnextyearand15percenttheyearafterthat.Fromthethirdyearonward,dividendsareexpectedtogrowat5.6percentperyearindefinitely.Iftherequiredrateofreturnis8.3percent,theintrinsicvalueofthestockisclosestto:A$26.00.B$27.00.C$28.00.SOLUTIONS:16Ciscorrect.NotethatD1=0.58(1.20)=0.70,D2=0.58(1.20)(1.15)=0.80,andP2=D3/(k–g)=0.80(1.056)/(0.083–0.056)=31.2917HidekiCorporationhasjustpaidadividendof￥450pershare.Annualdividendsareexpectedtogrowattherateof4percentperyearoverthenextfouryears.Attheendoffouryears,sharesofHidekiCorporationareexpectedtosellfor￥9000.Iftherequiredrateofreturnis12percent,theintrinsicvalueofashareofHidekiCorporationisclosestto:A￥5,850.B￥7,220.C￥7,670.SOLUTIONS:17Biscorrect.18TheGordongrowthmodelcanbeusedtovaluedividend-payingcompaniesthatare:Aexpectedtogrowveryfast.Binamaturephaseofgrowth.Cverysensitivetothebusinesscycle.SOLUTIONS:18Biscorrect.TheGordongrowthmodel(alsoknownastheconstantgrowthmodel)canbeusedtovaluedividend-payingcompaniesinamaturephaseofgrowth.Astabledividendgrowthrateisoftenaplausibleassumptionforsuchcompanies.19Thebestmodeltousewhenvaluingayoungdividend-payingcompanythatisjustenteringthegrowthphaseismostlikelythe:AGordongrowthmodel.Btwo-stagedividenddiscountmodel.Cthree-stagedividenddiscountmodel.SOLUTIONS:19Ciscorrect.TheGordongrowthmodelisbestsuitedtovaluingmaturecompanies.Thetwo-stagemodelisbestforcompaniesthataretransitioningfromagrowthstagetoamaturestage.Thethree-stagemodelisappropriateforyoungcompaniesjustenteringthegrowthphase.20AnequityanalysthasbeenaskedtoestimatetheintrinsicvalueofthecommonstockofOmegaCorporation,aleadingmanufacturerofautomobileseats.Omegaisinamatureindustry,andbothitsearningsanddividendsareexpectedtogrowatarateof3percentannually.WhichofthefollowingismostlikelytobethebestmodelfordeterminingtheintrinsicvalueofanOmegashare?AGordongrowthmodel.BFreecashflowtoequitymodel.CMultistagedividenddiscountmodel.SOLUTIONS:20Aiscorrect.Thecompanyisamaturecompanywithasteadilygrowingdividendrate.Thetwo-stage(ormultistage)modelisunnecessarybecausethedividendgrowthrateisexpectedtoremainstable.AlthoughanFCFEmodelcouldbeused,thatmodelismoreoftenchosenforcompaniesthatcurrentlypaynodividends.21ApriceearningsratiothatisderivedfromtheGordongrowthmodelisinverselyrelatedtothe:Agrowthrate.Bdividendpayoutratio.Crequiredrateofreturn.SOLUTIONS:21Ciscorrect.ThejustifiedforwardP/Eiscalculatedasfollows:P/Eisinverselyrelatedtotherequiredrateofreturn,r,anddirectlyrelatedtothegrowthrate,g,andthedividendpayoutratio,D/E.----------------------------筆記---------------------------FromEquity-Reading38-P386Pricemultiplesarefrequentlyusedindependentlyofpresentvaluemodels.Onepricemultiplevaluationapproach,themethodofcomparables,doesnotinvolvecashflowforecastsordiscountingtopresentvalue.Apricemultipleisoftenrelatedtofundamentalsthroughadiscountedcashflowmodel.Theexpressionsthataredevelopedcanbeinterpretedasthejustifiedvalueofamultiple—thatis,thevaluejustifiedby(basedon)fundamentalsorasetofcashflowpredictions.Theseexpressionsareanalternativewayofpresentingintrinsic-valueestimates.Asanexample,usingtheGordongrowthmodelidentifiedpreviouslyinEquation

9andassumingthatpriceequalsintrinsicvalue(P0=V0),wecanrestateEquation

9asfollows.ToarriveatthemodelforthejustifiedforwardP/EgiveninEquation

14,wedividebothsidesofEquationbyaforecastfornextyear’searnings,E1.InEquation,thedividendpayoutratio,p,istheratioofdividendstoearnings:Equation

indicatesthattheP/Eisinverselyrelatedtotherequiredrateofreturnandpositivelyrelatedtothegrowthrate;thatis,astherequiredrateofreturnincreases,theP/Edeclines,andasthegrowthrateincreases,theP/Eincreases.22TheprimarydifferencebetweenP/EmultiplesbasedoncomparablesandP/Emultiplesbasedonfundamentalsisthatfundamentals-basedP/Estakeintoaccount:Afutureexpectations.Bthelawofoneprice.Chistoricalinformation.SOLUTIONS:22Aiscorrect.Multiplesbasedoncomparablesaregroundedinthelawofonepriceandtakeintoaccounthistoricalmultiplevalues.Incontrast,P/EmultiplesbasedonfundamentalscanbebasedontheGordongrowthmodel,whichtakesintoaccountfutureexpecteddividends.----------------------------筆記---------------------------FromEquity-Reading38-P389Themethodofcomparablesisthemostwidelyusedapproachforanalystsreportingvaluationjudgmentsonthebasisofpricemultiples.Thismethodessentiallycomparesrelativevaluesestimatedusingmultiplesortherelativevaluesofmultiples.Theeconomicrationaleunderlyingthemethodofcomparablesisthelawofoneprice:Identicalassetsshouldsellforthesameprice.Themethodologyinvolvesusingapricemultipletoevaluatewhetheranassetisfairlyvalued,undervalued,orovervaluedinrelationtoabenchmarkvalueofthemultiple.Choicesforthebenchmarkmultipleincludethemultipleofacloselymatchedindividualstockortheaverageormedianvalueofthemultipleforthestock’sindustry.Someanalystsperformtrendortimeseriesanalysesandusepastoraveragevaluesofapricemultipleasabenchmark.23Ananalystmakesthefollowingstatement:“UseofP/Eandothermultiplesforanalysisisnoteffectivebecausethemultiplesarebasedonhistoricaldataandbecausenotallcompanieshavepositiveaccountingearnings.”Theanalyst’sstatementismostlikely:Ainaccuratewithrespecttobothhistoricaldataandearnings.Baccuratewithrespecttohistoricaldataandinaccuratewithrespecttoearnings.Cinaccuratewithrespecttohistoricaldataandaccuratewithrespecttoearnings.SOLUTIONS:23Aiscorrect.Thestatementisinaccurateinbothrespects.Althoughmultiplescanbecalculatedfromhistoricaldata,forecastedvaluescanbeusedaswell.Forcompanieswithoutaccountingearnings,severalothermultiplescanbeused.Thesemultiplesareoftenspecifictoacompany’sindustryorsectorandincludeprice-to-salesandprice-to-cashflow.24Ananalysthaspreparedatableoftheaveragetrailingtwelve-monthprice-toearning(P/E),price-to-cashflow(P/CF),andprice-to-sales(P/S)fortheTanakaCorporationfortheyears2014to2017.Asofthedateofthevaluationin2018,thetrailingtwelve-monthP/E,P/CF,andP/Sare,respectively,9.2,8.0,and2.5.Basedontheinformationprovided,theanalystmayreasonablyconcludethatTanakasharesaremostlikely:Aovervalued.Bundervalued.Cfairlyvalued.SOLUTIONS:24Aiscorrect.Tanakasharesaremostlikelyovervalued.Asthetablebelowshows,allthe2018multiplesarecurrentlyabovetheir2014–2017averages.25AnanalysthasgatheredthefollowinginformationfortheOudinCorporation:Expectedearningspershare=€5.70Expecteddividendspershare=€2.70Dividendsareexpectedtogrowat2.75percentperyearindefinitelyTherequiredrateofreturnis8.35percentBasedontheinformationprovided,theprice/earningsmultipleforOudinisclosestto:A5.7.B8.5.C9.4.SOLUTIONS:25Biscorrect.26Ananalystgathersthefollowinginformationabouttwocompanies:Whichofthefollowingstatementsismostaccurate?ADeltahasthehighertrailingP/EmultipleandlowercurrentestimatedP/Emultiple.BAlphahasthehighertrailingP/EmultipleandlowercurrentestimatedP/Emultiple.CAlphahasthehighertrailingP/EmultipleandhighercurrentestimatedP/Emultiple.SOLUTIONS:26Biscorrect.P/E=Currentprice/EPS,andEstimatedP/E=Currentprice/EstimatedEPS.AlphaP/E=$57.32/$3.82=15.01AlphaestimatedP/E=$57.32/4.75=12.07DeltaP/E=$18.93/$1.35=14.02DeltaestimatedP/E=$18.93/$1.40=13.5227Ananalystgathersthefollowinginformationaboutsimilarcompaniesinthebankingsector:Whichofthecompaniesismostlikelytobeundervalued?AFirstBank.BPrimeBank.CPioneerTrust.SOLUTIONS:27Ciscorrect.Relativetotheothers,PioneerTrusthasthelowestP/EmultipleandtheP/BmultipleistiedforthelowestwithPrimeBank.Giventhelawofoneprice,similarcompaniesshouldtradeatsimilarP/BandP/Elevels.Thus,basedontheinformationpresented,Pioneerismostlikelytobeundervalued.28Themarketvalueofequityforacompanycanbecalculatedasenterprisevalue:Aminusmarketvalueofdebt,preferredstock,andshort-terminvestments.Bplusmarketvalueofdebtandpreferredstockminusshort-terminvestments.Cminusmarketvalueofdebtandpreferredstockplusshort-terminvestments.SOLUTIONS:28Ciscorrect.Enterprisevalueiscalculatedasthemarketvalueofequityplusthemarketvalueofdebtandpreferredstockminusshort-terminvestments.Therefore,themarketvalueofequityisenterprisevalueminusthemarketvalueofdebtandpreferredstockplusshort-terminvestments.----------------------------筆記---------------------------FromEquity-Reading38-P394Analternativetoestimatingthevalueofequityistoestimatethevalueoftheenterprise.Enterprisevalueismostfrequentlydeterminedasmarketcapitalizationplusmarketvalueofpreferredstockplusmarketvalueofdebtminuscashandinvestments(cashequivalentsandshort-terminvestments).Enterprisevalueisoftenviewedasthecostofatakeover:Intheeventofabuyout,thea