CHAPTER 7 QUIZ 41 TO 43

CHAPTER 7  QUIZ 41 TO 43

41. The problem with the pure short-term earnings model is that the stock value is
highly sensitive to short-term swings in E.P.S.


42. The relative P/E model assumes that a company will keep its historical relationship
to the market (S&P 500) price-earnings ratio.

43. When an analyst uses the income statement method of forecasting earnings, she has
a limited amount of flexibility in adjusting the inputs


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