Question
Please answer after reading the PV model article. Due on 4/12 The article shows a perfect condition for valuation. In our real life, the value
Please answer after reading the PV model article. Due on 4/12 The article shows a perfect condition for valuation. In our real life, the value of assets cannot be estimated perfectly because we cannot be certain for the future cash flows that the asset generates, and also we cannot be certain for the discount rate. Because of the uncertainty for the future cash flows and the discount rate, we cannot complete the balance sheet if we do not have the income statement first. (a) Please discuss for how the uncertainty is related to earnings quality. (b) Can the uncertainty be reduced? How?
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