When forecasting future margins for companies, we often assume an L-curve for margins (where margins gradually go
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Question:
Give an example where this rule of thumb is inappropriate and explain why this is the case.
Would using this rule of thumb lead to an undervaluation or overvaluation of the firm?
Related Book For
Finance for Executives Managing for Value Creation
ISBN: 978-0538751346
4th edition
Authors: Gabriel Hawawini, Claude Viallet
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