Business, 14.02.2020 17:18 avaleasim

1. Suppose we consider a firm with positive net present value of growth opportunities. We saw that the price of the stock could be expressed as follows: If we divide each side of the equation by the firm's earnings per share, we arrive at a P/E ratio for which we could use to compare firms which have similar P/E multiples. However, this begs the question of just how comparable these firms are to each other. Explain how each of those determinants plays a part across supposedly similar firms.

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1. Suppose we consider a firm with positive net present value of growth opportunities. We saw that t...

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