Which of the following is NOT a drawback to using the P/E ratio when determining the value of a firm? Question 1 options:

Earnings can be small or negative.

Managers have discretion in determining reported earnings.

The transitory portion of earnings may be difficult to distinguish from the permanent portion.

The book value of assets may not reflect their current market value.

Question 2 (1 point) According to the lecture, the market value of Tesla is largely driven by its: Question 2 options:

Present Value of Growth Opportunities (PVGO)

current earnings

Economic Value Added (EVA)

Price-to-Book ratio