Janet Stringer argues that “the DCF valuation method has increased managers’ focus on short-term rather than long-term performance, since the discounting process places much heavier weight on short-term cash flows than long-term ones.” Comment.
Answer to relevant QuestionsHow would the forecasts in Table 8-2 change if TJX were to maintain a sales growth rate of 10 percent per year from 2011 to 2020 (and all the other assumptions are kept unchanged)?What would be the total equity value (as calculated for scenarios in Table 8-6 using abnormal earnings) if the sales growth in years 2021 and beyond is 8.5percent and the company is able to generate abnormal returns at the ...What is the difference between fundamental and technical analysis? Can you think of any trading strategies that use technical analysis? What are the underlying assumptions made by these strategies?Financial analysts typically measure financial leverage as the ratio of debt to equity. However, there is less agreement on how to measure debt, or even equity. How would you treat the following items in computing this ...A banker asserts, “I avoid lending to companies with negative cash from operations because they are too risky.” Is this a sensible lending policy?
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