As an exercise, you were given market data from which you estimated a company's value at $25 per share. You then learn the shares are trading at $80. What is the likely reason your estimate was off?

You assumed that the company would run out of innovative ideas, and made your best estimate in calculating the appropriate interest rate

you used data from the company's closest competitor in making your P/E times ESP calculations, rather than the average P/E in the industry

You used the discounted future cash flow method to estimate the price per share of the company in the exercise

You did not analyze net income, to determine if the companies you used data from preformed the same way as the company you were estimating