Valuation of financial assets requires knowledge of
A) company valuation.
B) an appropriate discount rate.
C) past asset performance.
D) future cash flows and an appropriate discount rate.

Question

Quizplus · Accepted Answer

Valuation of financial assets requires knowledge of future cash flows and an appropriate discount rate. This is because the value of an asset is determined by the present value of its expected future cash flows, and the discount rate is used to adjust for the time value of money and the risk associated with the asset. Company valuation and past asset performance may provide useful information, but they are not sufficient in determining an asset's value.

Valuation of Financial Assets Requires Knowledge of