Which of the following statements is false regarding the abnormal earnings approach to valuation? Multiple Choice The method uses earnings and equity book value numbers as direct inputs in the valuation process. The method uses the cost of capital as a fundamental economic benchmark. This approach produces results that are generally equivalent to the free cash flow model. This approach is based on the notion that the value of a company is driven primarily by the level of earnings.
Which of the following statements is false regarding the abnormal earnings approach to valuation? Multiple Choice The method uses earnings and equity book value numbers as direct inputs in the valuation process. The method uses the cost of capital as a fundamental economic benchmark. This approach produces results that are generally equivalent to the free cash flow model. This approach is based on the notion that the value of a company is driven primarily by the level of earnings.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 16MC: Which of the following is true about earnings management? A. It works within the constraints of...
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Which of the following statements is false regarding the abnormal earnings approach to valuation?
Multiple Choice
-
The method uses earnings and equity book value numbers as direct inputs in the valuation process.
-
The method uses the cost of capital as a fundamental economic benchmark.
-
This approach produces results that are generally equivalent to the
free cash flow model. -
This approach is based on the notion that the value of a company is driven primarily by the level of earnings.
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