Use the figure for the question(s)below.
-An investor estimates the value of a firm which manufactures cookware by examining the cash flows of similar firms. Which of the following is assumed to be the same for these firms?
A)payout rates
B)P/E
C)annual growth rates
D)All of the above

Question

Use the figure for the question(s)below. 
-An investor estimates the value of a firm which manufactures cookware by examining the cash flows of similar firms. Which of the following is assumed to be the same for these firms?
A)payout rates 
B)P/E 
C)annual growth rates 
D)All of the above

Quizplus · Accepted Answer

When an investor estimates the value of a firm by examining the cash flows of similar firms, it is assumed that factors such as payout rates, P/E (Price to Earnings) ratios, and annual growth rates are similar across these firms to make a valid comparison.

Use the Figure for the Question(s)below