Question

Explain why each of the following statements is generally incorrect:
a. "Price-earnings ratios should increase when the yield on government securities rises."
b. "A company's discounted cash-flow value is usually dominated by the magnitude of its expected cash-flow stream during the future five to ten years, whereas its terminal value usually has a negligible effect on its DCF value."
c. "The use of high debt ratios to finance leveraged buyouts is essentially a device to capture the tax savings generated by the deductibility of interest expenses."


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  • CreatedMarch 27, 2015
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