Firm A has a stock market value of 20m (number of shares in issue x share...
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Firm A has a stock market value of £20m (number of shares in issue x share price), while firm B is valued at £15m. The firms have similar profit histories: Firm B Firm A £m £m 2014 1.5 1.8 2015 1.6 1.0 2016 1.7 2.3 2017 1.8 1.5 2018 2.0 2.0 Provide some potential reasons why, despite the same total profit over the last five years, shareholders regard firm A as being worth £5m more (extend your thoughts beyond the numbers in the table). Firm A has a stock market value of £20m (number of shares in issue x share price), while firm B is valued at £15m. The firms have similar profit histories: Firm B Firm A £m £m 2014 1.5 1.8 2015 1.6 1.0 2016 1.7 2.3 2017 1.8 1.5 2018 2.0 2.0 Provide some potential reasons why, despite the same total profit over the last five years, shareholders regard firm A as being worth £5m more (extend your thoughts beyond the numbers in the table).
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Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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