(Answered) Question - the economic environment will determine the

Accounting

Question - The economic environment will determine the future cash flows of companies and these future cash flows are what most analysts use to value a company. Fundamental valuation of stock begins with an analysis of the economy in which the industries and companies operate. Future corporate profits, and therefore stock value, depends on the performance of the economy.

What is the underlying theory of this model? Around 150 words.

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