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Choose all that are appropriate. If two firms are in the same industry, the firm with a higher P/E ratio is expected to have more
Choose all that are appropriate.
- If two firms are in the same industry, the firm with a higher P/E ratio is expected to have more growth opportunities.
- The value of a firm can be calculated from the firm's balance sheet by subtracting the sum of all liability items from the sum of all the assets items.
- An assumption of discount rate of 10 percent and 3 percent growth would be broadly consistent with a multiple of enterprise value to free cash flow of 13.0.
- The cost of debt of a firm can be calculated by multiplying the firm's current ratio by the firm's credit rating and add the risk-free rate.
- One way to calculate the cost of equity of a firm is to take the risk-free rate and add the market risk premium adjusted by the firm's beta.
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