A. (1.5p) An analyst tells you that he uses price/earnings multiples, rather than discounted cash flow valuation, to value stocks, because he does not like making assumptions about fundamentals - growth, risk, and payout ratios. Is his reasoning correct?

B. (1.5p) Stock buybacks really do not return cash to stockholders because only those who sell back stock receive the cash. Is this statement true or false? Explain.