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NEW QUESTION: 1
Yummy Doughnuts (YD) sells a variety of doughnuts and other related items through both company-owned locations and franchise locations. YD has experienced significant growth over the past five years.
However, barriers to entry are low and competition is increasing.
Linda Haas, CFA, follows YD for Gibraltar Capital. Gibraltar Capital prides itself on its thorough fundamental analysis of investment opportunities. The company uses a bottom-up approach to the investment process. Haas's security selection process utilizes residual income models to determine a stock's intrinsic value. Haas obtains YD's 2008 financial statements shown in Exhibit 1. In addition, Haas provides supporting information about YD's financials and other related material found in Exhibit 2.

Haas makes the following statements during her YD presentation to the investment committee.
Statement 1: Based on ROE mean reversion, YD's continuing residual income is assumed to decline to zero over time.
Statement 2: The residual income model states that if YD's ROE equals its equity cost of capital, then YD's intrinsic value will equal its book value per share.
During her analysis, Haas came across some estimates of YD's intrinsic value prepared by another analyst. These estimates showed a weighted average cost of capital (WACC) of 12.0%, net operating profit after taxes (NOPAT) of $42 million, and a total adjusted capital base of $200 million. Based on these estimates, YD's residual return on capital (RROC) is closest to:
A. 9.0%.
B. 7.0%.
C. 12.0%.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
$WACC = WACC Capital = 0.12 200 = 24
EVA = NOPAT - $WACC = 42-24 = 18
RROC = EVA/Capital = 18 / 200 = 0.09
(Study Session 13, LOS 43.a)

NEW QUESTION: 2
You have a vSphere deployment consisting of ESXi 5.1 hosts and a vCenter Server 5.5. You are deploying NSX and begin by creating a vSphere Distributed Switch (vDS) on the vCenter Server using default settings. What is the next step in preparing the deployment for NSX?
A. Upgrade the ESXi hosts.
B. Use the option Add host networking.
C. Deploy NSX on each host.
D. Use the option Add and Manage Hosts.
Answer: A

NEW QUESTION: 3
DRAG DROP
Click the Task button.
Place the events in the order they occur.

Answer:
Explanation: