Which of the following statement is incorrect about Z-SCORE?
A The Z indicate the relative likehood of firm not going to bankrupt
B The higher of Z score means the firm is less likely to go bankrupt
C The weight are calculated to maximize the difference in Z scores within bankrupt or non bankrupt groups
D The weight are calculated to maximize the difference in Z score between groups
Which of the statement is correct?
A The capital assets pricing model states that the only diversifable that has to borne is the risk in the market as a whole
B All statement are correct
C capital assets pricing model requires estimate beta which can be accurately done by running regression analysis
D Fundamental risk is the risk that an investor bears as a result of the way a firm conducts its activities
E All statement are incorrect
F Prodit risk is the risk of profit margins changing for a given level of total assets
Which of the flowing statement is incorrect”?
A If firms issue debt to finance the growth or liquidate financial assets no growth in equity occurs.
B A trailing P/E can be high because current earning are temporaily low even though expected indicate the P/E should otherwise be low
C All statement are correct
D A firm with a high p/e and a low P/B is one where residual earning are expected to increase from the current level but are expected to be lower than zero