USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 24

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The aggregate market currently has a retention ratio of 60 percent, a required rate of return of 12 percent, and an expected growth rate for dividends of 4 percent.
-Refer to Exhibit 9.9. Starting with the initial conditions, you expect the retention ratio to be constant, the rate of inflation to increase by 2 percent, and the growth rate to increase by 1 percent. What is the expected P/E?

• A) 4.44
• B) 5.00
• C) 5.71
• D) 6.67
• E) 8.00

Understand the purpose and types of fees associated with mutual funds.

Determine the share count of a mutual fund based on its NAV and net assets.

Identify factors that influence the net asset value of mutual fund shares.

Understand the advantages and characteristics of mutual funds and Exchange Traded Funds (ETFs).

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Definitions:

Current Assets

Properties expected to be turned into cash, sold, or expended within the span of one year or the typical operating period of the enterprise.

Current Asset

A resource anticipated to be transformed into cash, disposed of, or utilized within a year or the length of the operating cycle, whichever duration is greater.

Order of Liquidity

Refers to the sequence in which assets are ranked based on how quickly they can be converted into cash, with cash being the most liquid asset.

Accounts Payable

A liability to a creditor, carried on open account, usually for purchases of goods and services.