Exhibit 12.3 Use the Information Below for the Following Problem(S)

question 2

Multiple Choice

Exhibit 12.3
Use the Information Below for the Following Problem(S)
Assume that the dividend payout ratio will be 55 percent when the rate on long-term government bonds falls to 9 percent. Since investors are becoming more risk averse, the equity risk premium will rise to 8 percent and investors will require a 7 percent return. The return on equity will be 13 percent.
-Refer to Exhibit 12.3.What is your expectation of the market P/E ratio?

• A) 37.69
• B) 24.92
• C) 58.15
• D) 55.02
• E) 47.82

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Definitions:

Courtship Disorder Theory

A theory of sexual offending advanced by Kurt Freund that postulates that sexual offending occurs when a person’s sexual behaviour becomes fixated at one of the four phases of human sexual interactions: (1) looking for and appraising a potential partner; (2) posturing and displaying oneself to the partner; (3) tactile interaction with the partner; and (4) sexual intercourse. Fixation at stage 1 results in voyeurism; at stage 2 in exhibitionism; at stage 3 in frotteurism; and at stage 4 in rape.

Sexual Offending

Acts committed by an individual that violate the sexual integrity of another person, often subject to legal prosecution.

Neurodevelopmental Theory

A framework focusing on how the brain and nervous system grow and develop, influencing cognitive functions and behaviors across the lifespan, often used to understand developmental disorders.

Pedophilia

A form of paraphilia that is also a criminal offence, in which a person has recurrent fantasies or behaviours involving sexual activity with prepubescent children.