Question: The method we are using to value a company assumes that net operating margin (NOPM) remains constant over time even as net sales increase, but

The method we are using to value a company assumes that net operating margin (NOPM) remains constant over time even as net sales increase, but if NOPM actually increases over time as net sales increase, then the method we used to value a company would

A. Understate the value of the company

B. Overstate the value of the company

C. Understate the value of the company if the discount rate is high but overstate the value of the company if the discount rate is low

D. Overstate the value of the company if the discount rate is high but understate the value of the company if the discount rate is low

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