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Question 12 3 pts A mining company, with a stable growth of 3%, has net income of $80 million and market value of equity of $300 million. A decrease in the risk-free rate causes the cost of equity to increase by 2%. Because of its reinvestment policy, the firm is now forced to increase its dividend payout ratio by 2%. What will happen to its price-to-earnings (P/E) ratio? The price-to-earnings ratio will increase The price-to-earnings ratio will decrease O The price-to-earnings ratio will remain unchanged Question 13 2 pts Based on the following selected financial information for Kramerica Corporation, calculate the firm's operating cash conversion cycle, in days (assume 365 days in a year). Revenues: $150,000 Cost of Goods Sold: $80,000 Receivables: $12,000 yables: $12,000 Inventory: $12,000 31 days 22 days 26 days 29 days Question 14 3 pts You want to evaluate three institutional funds using the information ratio measure for performance evaluation. The risk-free return during the sample period is 2%, and the equity risk premium is 5%. The average returns, residual standard deviations, and betas for these three institutional funds are given below: Return Residual Standard deviation Beta JPMorgan 15% 5% 1.20 Fidelity 10% 10% 0.80 BGI 30% 12% 0.80 Based on the Information Ratio of performance evaluation, which of the following institutional funds represents the best investment opportunity? BGI represents the best investment opportunity O JPMorgan represents the best investment opportunity None of them is a profitable investment opportunity Fidelity represents the best investment opportunity

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