The Franchise P/E Is a Function of

question 31

Multiple Choice

The franchise P/E is a function of

• A) Relative rate of return on new business opportunities
• B) Size of superior return opportunities.
• C) Duration of earnings growth.
• D) a and b
• E) a, b and c

---

Definitions:

Trend Component

An underlying pattern in a time series data set that shows the direction and pace at which the series values change over time.

Exponentially Smoothed Values

Values obtained using exponential smoothing, a technique to forecast data by giving more weight to recent observations.

Motor Oil Sales

The commercial activity of selling oil used for lubricating the engines of vehicles.

Exponentially Smoothed Sales

A forecasting technique that applies weighting factors which decrease exponentially over time, used to smooth time series data.