Which of the following statements concerning the valuation of firms using the method of comparables is FALSE?
A) If two different firms generate identical cash flows, the Law of One Price will imply that both firms have the same value.
B) Comparables adjust for scale differences when valuing similar firms.
C) Valuation multiples take into account differences in the risk and future growth between the firms being compared.
D) Two firms that sell very similar products or offer very similar services will have different values if they are of different sizes.
Answer: C
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Data for Sherman, Inc are as follows
2017 2016 Net Sales $850,000 $798,000 Cost of Goods Sold 635,000 580,000 Selling and Administrative Expenses 50,000 35,000 Other Expenses 20,000 15,000 Income Tax 40,000 55,000 Prepare a horizontal analysis of the comparative income statement of Sherman, Inc (Round to one decimal place.) Use a multi-step income statement. What will be an ideal response
The statistical distribution that is used for testing the difference between two population variances is the:
A) Student's t distribution. B) standard normal distribution. C) binomial distribution. D) distribution.