The Disclosure Document Provided by the Franchisor

question 14

Multiple Choice

The disclosure document provided by the franchisor:

• A) is required by the FTC.
• B) will state a guaranteed yearly return for the franchisee.
• C) is done on a voluntary basis.
• D) has information that is certified by a CPA and the FTC so it is always a reliable source of data.

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Definitions:

P/E Ratio

The price-to-earnings ratio is a valuation metric for a stock, calculated by dividing the market price of a share by the earnings per share, indicating how much investors are willing to pay per dollar of earnings.

Price-to-Sales Ratio

A valuation ratio that compares a company's stock price to its revenues, an indicator of the value placed on each dollar of a company's sales or revenues.

Dividend Discount Model

A method of valuing a company's stock price based on the theory that its stock is worth the sum of all its future dividend payments, discounted back to their present value.

Telecommunications

The transmission of signals, messages, words, writings, images, and sounds or information of any nature by wire, radio, optical, or other electromagnetic systems.