A Unit Investment Trust in the U.S

question 31

Multiple Choice

A Unit Investment Trust in the U.S.

• A) owns a fixed set of investments.
• B) invests only in municipal bonds.
• C) retains all dividend and interest earnings.
• D) charges a large annual management fee.

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Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability that excludes the effect of financial and tax decisions.

Depreciation

The allocation of the cost of an asset over its useful life, reflecting the decrease in value due to use and age.

Terminal Growth Rate

The rate at which a company's free cash flow is expected to grow at indefinitely, used in the discounted cash flow analysis to estimate a company's value.

Plowback Ratio

The proportion of earnings retained by a business, rather than paid out as dividends, to reinvest in its core activities.