In theory,all three valuation models,when correctly implemented with internally consistent assumptions,will produce the same estimates of value.However,in practice,which of the following errors can result in different value estimates?
A) incomplete or inconsistent earnings and cash flow forecasts.
B) inconsistent estimates of weighted average costs of capital.
C) incorrect continuing value computations.
D) All of these errors result in different value estimates.

Question

Quizplus · Accepted Answer

All three errors, incomplete or inconsistent earnings and cash flow forecasts, inconsistent estimates of weighted average costs of capital, and incorrect continuing value computations, can result in different value estimates. Therefore, the best choice is D, which includes all of these errors.

In Theory,all Three Valuation Models,when Correctly Implemented with Internally Consistent