Question 12 John Blake, CFA, is assessing the share prices of two pharmaceutical companies using the method of comparables. Details of the companies are as follows: Wayne Pharmaceuticals Inc.: Operates primarily in the European market and uses IFRS for preparing financial statements. Harvey Healthcare Corporation: Operates primarily in the U.S. market and follows U.S. GAAP for financial reporting Even though in their mature phase, both companies incur huge research and development costs every year. If an unadjusted P/E multiple is used by Blake, what is the most likely effect of the difference in 1, orting standards to the share price from the perspective of the investor? O The shares of Wayne Pharmaceuticals will appear more favorably priced compared to Harvey Healthcare The shares of Harvey Healthcare will appear more favorably priced compared to Wayne Pharmaceuticals The difference in reporting standards will have no effect on share prices