Question 1 a valuation that simply capitalizes a forecast, Ask an Expert

Finance

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?

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Category:- Basic Finance
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