Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 3 of 4
What models provide the basis and rationale for the method which is based on forecasted fundamentals?
B. Discounted cash flow models.
C. The law of one price.
A. P/E comparables.
B. Discounted cash flow models.
C. The law of one price.
User Contributed Comments 0
You need to log in first to add your comment.
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
contrast the method of comparables and the method based on forecasted fundamentals as approaches to using price multiples in valuation, and explain economic rationales for each approach;
calculate and interpret a justified price multiple;
describe rationales for and possible drawbacks to using alternative price multiples and dividend yield in valuation;
CFA® 2025 Level II Curriculum, Volume 4, Module 23.