1. A company has annual sales of $160 million, a net profit margin of 4%, and total assets of $90 million. It carries $10 million in accounts receivable, $25 million in inventory, has $55 million in total debt, and 5 million shares of common stock outstanding. Based on this information, the company's return on equity (ROE) is

A. 4.4% B. 7.1% C. 11.5% D. 18.3%

2. JJ Industries has a P/E ratio of 18 and an EPS of $0.93. This means that JJ's stock is currently selling for

A. $16.74 per share B. $17.07 per share C. $18.00 per share D. $19.35 per share

3. The PEG ratio

A. preferred by investors is equal to 2.0 or higher

B. Compares the price/earnings ratio to the rate of growth of the company's earnings.

C. is a measure of a firm's liquidity

D. measures the ability of a firm's assets to generate growth for the firm

4. Which of the following variables affect the P/E ratio?

1. capital structure of a firm

2. amount of dividends paid

3. inflation rate

4. earnings rate of growth

A. 1, 2 and 3 only

B. 1, 2 and 4 only

C. 1, 3 and 4 only

D. 1, 2, 3 and 4

5. Which of the following statements correctly recommendations based on behavioral finance?

1. Don't hesitate to sell a losing stock

2. Trade frequently

3. Chase performance

4. Be humble and open-minded

A. 1 and 2 only

B. 1 and 4 only

C. 2 and 3 only

D. 3 and 4 only

6. A company has 2 million shares of common stock outstanding. Annual sales are $26 million. The net profit margin is 8% and the dividend payout ratio is 40%. Currently the stock trades at $17.68 per share. Given this information, the company has a P/E ratio of

A. 16 and a dividend yield of 2.35%

B. 16 and a dividend yield of 3.20%

C. 17 and a dividend yield of 2.35%

D. 17 and a dividend yield of 3.20%

7. Tureves S.A. is a French biotechnology company that has developed promising therapies for hair loss, obesity, and wrinkled skin. Sales have doubled in each of the last three years, but so far, the company has yet to turn a profit. Which common procedures would be most, and least appropriate to value Tureves' ADRs.