How can we value firms that don\'t pay dividends? We can\'t, so we let the marke
ID: 3283625 • Letter: H
Question
How can we value firms that don't pay dividends?
We can't, so we let the market do it.
We use the average of the firm's last few stock prices.
We use the Cramer no-cash-flow method.
We can compare the firm to comparable firms using P/E ratios.
We use the present value of the all the firm's expected future sales.
A.We can't, so we let the market do it.
B.We use the average of the firm's last few stock prices.
C.We use the Cramer no-cash-flow method.
D.We can compare the firm to comparable firms using P/E ratios.
E.We use the present value of the all the firm's expected future sales.
Explanation / Answer
We can compare the firm to to comparable firms using P/E rations
And also
We use the present value of the all form's expected future sales.
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