USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 215

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 9.10. In the listing above, which three factors influence the earnings multiple for a stock?

• A) 1, 4, and 5
• B) 1, 4, and 6
• C) 2, 4, and 6
• D) 2, 5, and 6
• E) 4, 5, and 6

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Definitions:

Ordinary Annuity

A series of equal payments made at equal intervals of time, with the payments occurring at the end of each period.

Present Value Factors

The factors used to calculate the present value of a future amount of money or stream of cash flows, given a specific discount rate.

Long-term Lease Obligation

A financial commitment that involves leasing an asset for a long-term period, noted on the balance sheet as a liability.

Capital Lease

A Capital Lease is a lease agreement that has the characteristics of a purchase agreement for accounting purposes.