The valuation process includes the following EXEPT A.) understanding the business or asset B.) deciding the valuation model to be used C.) discounting past cashflow D.) forecasting financial performance of the valuation object

The valuation process includes the following EXEPT A.) understanding the business or asset B.) deciding the valuation model to be used C.) discounting past cashflow D.) forecasting financial performance of the valuation object

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 20MCQ

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Question

The valuation process includes the following EXEPT

A.) understanding the business or asset

B.) deciding the valuation model to be used

C.) discounting past cashflow

D.) forecasting financial performance of the valuation object

Which statement regarding relative valuation is true?

A.) The value of a share of a hotel business can be compared to the value of a share of an airline business.

B.) Relative valuation is often focused on current ratios that can be used to compare similar assets or entities.

C.) Relative valuation using book values is more accurate than using market values.

D.) Peer group average allows the comparison of multiple pairings of similar entities, (e.g., A vs B, B vs C, and A vs C)

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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