Which of the Following Is NOT an Advantage of the Valuation

question 4

Multiple Choice

Which of the following is NOT an advantage of the valuation multiple method as compared to the discounted cash flow method?

• A) calculations based upon widely available information
• B) based upon actual stock prices of real firms
• C) does not rely on estimates of future cash flows
• D) takes into account important differences between different firms

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Definitions:

Stemplots

A graphical method of displaying quantitative data, typically used to show the distribution of smaller datasets.

Histograms

Histograms are graphical representations of the distribution of numerical data, where the data is divided into bins or intervals, and the frequency of data points in each bin is depicted by the height of the bar.

Leaf

Typically refers to the green, flat structure attached to a stem or branch of a plant, involved in photosynthesis.

Stem

In the context of a stem-and-leaf plot, it represents the leading digit(s) in a group of numbers which are used to organize and display data graphically.