ESSENTIALS OF INVESTMENTS
(GLOBAL EDITION) CHAPTER 13
QUESTIONS WITH CORRECT ANSWERS
2024-2025
bookPvalueP-PcorrectPanswer-thePnetPworthPofPcommonPequityPaccordingPtoPaPfirm'sPbalancePsheet
liquidationPvalueP-PcorrectPanswer-
netPamountPthatPcanPbePrealizedPbyPsellingPthePassetsPofPaPfiirmPandPpayingPoffPthePdebt
replacementPcostP-PcorrectPanswer-costPtoPreplacePaPfirm'sPassets
Tobin'sPqP-PcorrectPanswer-ratioPofPmarketPvaluePofPthePfirmPtoPreplacementPcost
intrinsicPvalueP-PcorrectPanswer-
thePpresentPvaluePofPaPfirm'sPexpectedPfuturePnetPcashPflowsPdiscountedPbyPthePrequiresPratePofPreturn
marketPcapalizationPrateP-PcorrectPanswer-
thePmarketPconsensusPestimatePofPthePappropiatePdiscountPratePforPaPfirm'sPcashPflows
dividendPdiscountPmodelP(DDM)P-PcorrectPanswer-
aPformulaPforPthePintrinsicPvaluePofPaPfirmPequalPtoPthePpresentPvaluePofPallPexpectedPfuturePdividends
constantPgrowthPDDMP-PcorrectPanswer-
aPformPofPthePdividendPdiscountPmodelPthatPassumesPdividendsPwillPgrowPatPaPconstantPrate
dividendPpayoutPratioP-PcorrectPanswer-percentagePofPearningsPpaidPoutPasPdividends
plowbackPratioPorPearningsPretentionPratioP-PcorrectPanswer-
thePproportionsPofPthePfirm'sPearningsPthatPisPreinvestedPinPthePbusinessP(andPnotPpaidPoutPasPdividends)
(GLOBAL EDITION) CHAPTER 13
QUESTIONS WITH CORRECT ANSWERS
2024-2025
bookPvalueP-PcorrectPanswer-thePnetPworthPofPcommonPequityPaccordingPtoPaPfirm'sPbalancePsheet
liquidationPvalueP-PcorrectPanswer-
netPamountPthatPcanPbePrealizedPbyPsellingPthePassetsPofPaPfiirmPandPpayingPoffPthePdebt
replacementPcostP-PcorrectPanswer-costPtoPreplacePaPfirm'sPassets
Tobin'sPqP-PcorrectPanswer-ratioPofPmarketPvaluePofPthePfirmPtoPreplacementPcost
intrinsicPvalueP-PcorrectPanswer-
thePpresentPvaluePofPaPfirm'sPexpectedPfuturePnetPcashPflowsPdiscountedPbyPthePrequiresPratePofPreturn
marketPcapalizationPrateP-PcorrectPanswer-
thePmarketPconsensusPestimatePofPthePappropiatePdiscountPratePforPaPfirm'sPcashPflows
dividendPdiscountPmodelP(DDM)P-PcorrectPanswer-
aPformulaPforPthePintrinsicPvaluePofPaPfirmPequalPtoPthePpresentPvaluePofPallPexpectedPfuturePdividends
constantPgrowthPDDMP-PcorrectPanswer-
aPformPofPthePdividendPdiscountPmodelPthatPassumesPdividendsPwillPgrowPatPaPconstantPrate
dividendPpayoutPratioP-PcorrectPanswer-percentagePofPearningsPpaidPoutPasPdividends
plowbackPratioPorPearningsPretentionPratioP-PcorrectPanswer-
thePproportionsPofPthePfirm'sPearningsPthatPisPreinvestedPinPthePbusinessP(andPnotPpaidPoutPasPdividends)