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1.
A price/earnings ratio that uses future earnings estimates to calculate the ratio is normally called _______.
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A forward price/earnings ratio. As opposed to a trailing price/earnings ratio, which looks at past earnings, the forward one uses estimates of future earnings.
2.
What would a stock dividend yield of 0% tell you?
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The company is not paying any dividend at all. If you have a zero on the top half the formula, where the annual dividends per share go, then no dividend is being paid.
3.
What does a company's price/sales ratio measure?
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Its stock's market price divided by its sales per share. As such, it is a very useful ratio for businesses.
4.
The formula for cash return is free cash flow plus net interest expense, the sum of which is then divided by _______.
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Enterprise value. Enterprise value is the figure that goes into the denominator.
5.
A company's price/earnings growth ratio uses its stock's current price in the calculation.
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False. The ratio uses forward price/earnings ratio, which is a future estimate.
6.
If a stock has a price/earnings ratio of 20, based on a price of $100 and an earnings per share of $5, its earnings yield is _______.
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5%. Earnings yield can be gotten by inverting the price/earnings ratio.
7.
In a typical price/book ratio, what exactly is the book value part of it?
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The total equity divided by the number of shares outstanding. Altogether, this is the "book value" that purports to show what a share of stock is objectively worth.