Security Analysis Homework! Help needed 20-24 Pls I will Upvote

20. Joel Greenblatt cautions that companies earning high returns on capital will attract competition (capitalism is a tough system) that will destroy their ability to carn aboveaverage profits over time. Thus, earning high returns on capital is not sustainable in the long run. A) True B) False 21. Stockholders of Dog's R Us Pet Supply expect a 12% rate of return on their stock. Management has consistently been generating a ROE (return on equity) of 15% over the last 5 years but now believes that ROE will be 12% for the next five years. Given this, the firm's optimal dividend payout ratio is now A) 100% B) 0% C) between 0% and 50% D) between 50% and 100% 22. Which of the following valuation measures is often used to compare firms that have no earnings? A) price-to-book ratio B) P/E ratio C) price-to-cash-flow ratio D) price-to-sales matio 23. The price-to-earnings ratio depends on the growth rate and on risk. A) positively; positively B) negatively; negatively C) positively; negatively D) negatively; positively 24. Buffett's macroeconomic indicator for the stock market is the ratio. A) total market cap/GDP B) GDP/total market cap C) total market cap/replacement value D) GDP/enterprise value E) total market cap/liquidation value