A valuation that simply capitalizes a forecast of operating


Question: 1. A valuation that simply capitalizes a forecast of operating income for the next year implicitly assumes that residual operating income will continue as a perpetuity. Is this correct?

2. An analyst forecasts that next years core operating income for a firm will be the same as the current years core operating income. Under what conditions is this a good forecast?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: A valuation that simply capitalizes a forecast of operating
Reference No:- TGS02286732

Expected delivery within 24 Hours