NetSuite-Financial-User PDF Testsoftware, NetSuite-Financial-User Originale Fragen & NetSuite-Financial-User Fragen Beantworten - Championlandzone

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  • Vendor : NetSuite
  • Certifications : Financial User Certification
  • Exam Name : NetSuite Financial User Certification Exam
  • Exam Code : NetSuite-Financial-User
  • Total Questions : 376 Q&As
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VCE Exam Simulator is a test engine designed specifically for certification exam preparation. It allows you to create, edit, and take practice tests in an environment very similar to an actual exam.


What is VCE Simulator?
VCE Exam Simulator is a test engine designed specifically for certification exam preparation. It allows you to create, edit, and take practice tests in an environment very similar to an actual exam.
SKU: NetSuite-Financial-User Categories: ,

Description

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    D. Credit Risk
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    NEW QUESTION: 3
    Travis Smith, CFA, is chief economic strategist and market analyst for Nashville Capital Management. He is developing a forecast of the S&P 500 stock market index utilizing different approaches.
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    * 3-month T-bill rate: 3.5%
    * 30-year T-bond rate: 5.0%
    Smith uses an equity market premium equal to 6%. His estimate for the long-term outlook for ROE is 11%, and the long-run earnings retention rate is estimated at 40%.
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    1. Index of industrial production.
    2. Interest rate spread between 10-year T-bonds and the fed funds rate.
    3. Stock prices.
    Smith is particularly interested in using stock market trends to predict economic turning points.
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    * Nominal GDP long-term growth rate trend: 4.25%
    * Federal Reserve inflation target: 2.25%
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    Smith's supervisor, Rasheed Gupta, requests a valuation of the S&P500 using a free cash flow to equity (FCFE) model. Gupta makes the following statement:
    "A valuation model that replaces dividends with free cash flow to equity is a good alternative to the DDM If
    1 remember correctly, free cash flow to equity equals net income plus depreciation." Using the dividend discount model. Smith's estimate of the current S&P 500 valuation should be closest to:
    A. 0
    B. 950.
    C. 545.
    Answer: B
    Explanation:
    Explanation/Reference:
    Explanation:
    The reduced form DDM refers to the constant growth model:
    V0=D1= / (k-g)
    The growth rate in dividends is estimated as the product of the return on equity (ROE) and the earnings retention rare:
    g - 0.40 x 0.11 -= 0.044 - 4.4% (retention rate x ROE)
    The required return is estimate-d as the sum of the risk-free rare plus marker equity risk premium:
    k = 0.05 + 0.06 = 0.11 (long-term RFR + risk premium)
    D1= = $60 (1 + g) = 560 (1.044) = $62.64
    V0= = D1 = / (k - g) = $62.64 I (0.11 - 0.044) = 949.09
    (Study Session 7, LOS 24.c)


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