The Mathematical Modeling Approaches Presented in the Textbook

question 63

Multiple Choice

The mathematical modeling approaches presented in the textbook

• A) are a subset of the total problem-solving process.
• B) cover the entire spectrum of decision support approaches.
• C) are exhaustive.
• D) are complementary.

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Definitions:

Capitalized Earnings Model

A method to value a company by dividing its earnings by the capitalization rate, assuming constant future earnings.

P/E Ratio

Price-to-Earnings Ratio, a valuation metric that compares a company's stock price to its per-share earnings, used to evaluate if a stock is over or undervalued.

EPS

Earnings per share, a company's profit divided by its number of outstanding shares.

Intrinsic Value

The actual value of a company or an asset based on underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.