Using Pro-Forma Income Statements to Estimate Earnings Per Share Over

question 52

Multiple Choice

Using pro-forma income statements to estimate earnings per share over using regression analysis has several advantages except which one of the following?

• A)The analyst is able to study profitability and the effects of taxes on profit margins
• B)Interest expense,and debt and equity financing can be factored into the analysis
• C)Hidden problems in stable growth firms would be brought out
• D)Effects of the business cycle on profit margins can be included in the forecast

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