Question: [1.] Earnings multiples analysis is based on permanent earnings. Define permanent earnings. Earnings multiples analysis can use trailing multiples or forward multiples. Describe trailing multiples

[1.] Earnings multiples analysis is based on permanent earnings. Define permanent earnings. Earnings multiples analysis can use trailing multiples or forward multiples. Describe trailing multiples and forward multiples.Describe at least two of the four limitations of earnings multiples analysis.

[2.] What hurdle rate issue arises when evaluating leveraged buyouts? What is the appropriate hurdle rate that the analyst should use? When the acquirer and the target company operate in different industries, what hurdle rate issue arises?

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