Question: In the Apple Tree article, we discussed for a couple of ways to value business: earnings capitalization vs. discounted cash flows. Which one correctly shows

In the Apple Tree article, we discussed for a couple of ways to value business: earnings capitalization vs. discounted cash flows. Which one correctly shows the sequence of earnings capitalization process?

Group of answer choices

forecast of I/S -> forecast of annual earnings for business life --> determination of the cost of equity ---> Calculation of present value of future earnings.

determination of cost of equity -> forecast of annual earnings for business life --> forecast of I/S ---> Calculation of present value of future earnings.

Calculation of present value of future earnings--> determination of cost of equity -> forecast of annual earnings for business life --> forecast of I/S

determination of cost of equity -> forecast of annual earnings for business life -->Calculation of present value of future earnings --> forecast of I/S.

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