Why are differences in companies’ value creation more apparent from comparing their market-value-to-capital multiples than their market-valueto- earnings multiples?
Answer to relevant QuestionsDiscuss what pattern you would expect over time for market-value-tocapital and market-value-to-earnings multiples in an industry where earnings show little long-term growth but high cyclicality. Many corporate executives focus on earnings per share (EPS) and attempt to manage reported earnings in order to meet analysts’ expectations. Can managers succeed in protecting the stock price of their company by managing ...In the past, a fast-growing mobile telecommunications company has always capitalized its customer acquisition costs. For the next few years, management expects growth in its customer base to slow significantly, probably ...What are the key strategic and tactical opportunities for an industrial company in case of general stock market overvaluation (and undervaluation)? What is typically preventing companies from capturing such opportunities? Explain why the value of a business may differ under different owners.
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