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NEW QUESTION: 1
Ivan Johnson is reviewing the investment merits of BioTLab, a fast-growing biotechnology company.
BioTLab has developed several drugs, which arc being licensed to major drug companies. BioTLab also has several drugs in phase III trials (phase III trials are the last testing stage before FDA approval).
Johnson notes that two drugs recently received approval which should provide BioTLab solid revenue growth and generate predictable cash flow well into the future. Based on the potential for the two drugs, BioTLab's estimated annual cash flow growth rate for the next two years is 25%, and long-term growth is expected to be 12%. Because of BioTLab's attractive investment opportunities, the company does not pay a dividend. BioTLab's current weighted average cost of capital is 15% and its stock is currently trading at
$50 per share. Financial information for BioTLab for the most recent 12 months is provided below:
* Net working capita! excluding cash increased from $7,460,000 to $9,985,000;
* Book value increased from $81,250,000 to $101,250,000.
* BioTLab currently has no debt.
* Research facilities and production equipment were purchased for $8,450,000.
* BioTLab held non-operating assets in the amount of $875,000.
* Net income for the 12 months was $20,000,000.
* BioTLab has a marginal tax rate of 40%.
* Noncash charges for depreciation and restructuring for the 12 months were $1,250,000.
BioTLab's management has indicated an interest in establishing a dividend and will fund new drug research by issuing additional debt.
Johnson also reviews a competitor to BioTLab, Groh Group, which has a larger segment operating in a highly cyclical business. The Groh Group has a debt to equity ratio of 1.0 and pays no dividends. In addition, Groh Group plans to issue bonds in the coming year.
Which of the following statements regarding free cash flow models is least likely correct?
A. Sensitivity analysis indicates that the FCFE model's valuation of BioTLab's common stock is most sensitive to the company's growth rate.
B. FCFF can be inflated by increasing capital expenditures relative to depreciation.
C. FCFE is net income plus depreciation minus net capital expenditures minus the increase in working capital plus net new debt financing.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
FCFF can be inflated by decreasing capital expenditures relative to depreciation. All other statements are true. (Study Session 12, LOS 41.f,h)

NEW QUESTION: 2

A. Option C
B. Option B
C. Option E
D. Option D
E. Option A
Answer: A

NEW QUESTION: 3
You execute the command hdfs dfs -1s to view the directory listing on the Edge/Gateway node in a secured
cluster, but get an error.
You were able to execute the same command successfully 24 hours ago. No changes have been mode to the
user or the infrastructure.
How do you fix the problem?
A. You are on wrong node. The hdfs dfs -1s command can only be executed form the Name Node.
B. A valid Kerberos exists hut you need to initialize it using the KINIT command.
C. You need to reboot the Hadoop CLUSTER to reinstate access to users.
D. You need to obtain n valid Kerberos ticket by executing the KINIT command.
Answer: A

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