Which of these is the weakest reason to prefer using the Discounted Cash Flow Method over...
Which of these is the weakest reason to prefer using the Discounted Cash Flow Method over the Multiples Method to value firm A which operates in industry B?
Group of answer choices
a. There is no rush to arrive at an answer.
b. You believe the other firms in industry B are generally valued by the market at less than their true worth.
c. You think you can accurately project firm A's future cash flows.
d. There are many public firms in industry B similar to firm A.
Homework Answers
D is correct. If there are many similar public firms in industry B, then it is the weakest reason to use DCF.
A is incorrect because if there is no rush then DCF is preferred.
B is incorrect because if other firms are valued less than again DCF is preferred.
C is incorrect because if you can accurately project FCF then DCF is preferred.
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Which of these is the weakest reason to prefer using the
Discounted Cash Flow Method over...
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