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4. Among the following statements, only 3 are correct. Identify which ones. a) The market value...

4. Among the following statements, only 3 are correct. Identify which ones. a) The market value of a company depends on its past earnings b) Growth in future earnings has an impact on the value of a company's stock c) Investors are more focused on cash flows than profit when valuing a company's stock d) Qualitative factors may impact the value of a company's stock e) The DCF valuation methodology relies on cash flow forecasts

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Answer #1

The correct ones are:

b) Growth in future earnings has an impact on the value of a company's stock

c) Investors are more focused on cash flows than profit when valuing a company's stock

e) The DCF valuation methodology relies on cash flow forecasts

Past earnings do not affect stock price as the price is based on future earnings

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