Why should a scenario approach to valuation be used to value cyclical companies?
Answer to relevant QuestionsIf growth is a significant value driver, does getting bigger translate into creating value? Which type of business, a software company or an electric utility, would benefit more from improving ROIC than from increasing growth? Why? What actions (good and bad) might managers take when investors have already-high expectations and managers desire to outperform peers on TRS? What are the potential reasons cyclical companies invest cyclically rather than countercyclically? If a bank attracts new equity to increase its Tier 1 capital ratio, what happens to its cost of equity and its intrinsic value if it invests the new equity capital in (1) deposits with the central bank, or (2) a broad equity ...
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