Which of the following items is an advantage of the discounted cash flow (DCF) model, compared with the residual operating income (ROPI) model?
A) It forecasts residual operating income which is easier than forecasting cash flow.
B) It utilizes information from both the balance sheet and income statement for valuation model.
C) It is well known and widely accepted model
D) It focuses on value drivers such as margins and turnovers
E) All of the above

Question

Quizplus · Accepted Answer

The DCF model is well known and widely accepted for valuation purposes, making it a preferred choice for many analysts and investors due to its focus on future cash flows and the time value of money.

Which of the Following Items Is an Advantage of the Discounted