Problem #1 An analyst tells you that he uses price/earnings multiples, rather than discounted cash flow valuation, to value stocks, because he does not link making assumptions about fundamental -growth, risk, and payout ratios. Is his reasoning correct?

Problem #2 Why might discounted cash flow valuation be difficult to do for the following types of firms? A. So private firm, where the owner is planning to sell the firm. B. A biotechnology firm, with no current products or sales, but with several promising product parents in the pipeline. C. A cyclical firm, during a recession. D. A troubled firm, which has made significant losses and is not expected to get out of trouble for a few years. E. A firm, which is in the process of restructuring, where it is selling some of its assets and changing its financial mix. F. A firm, which owns a lot of valuable land that is currently unutilized.