While the core principle in corporate finance (and perhaps finance in general) indicates to us how we should focus on firms cash flows, a good proportion of managers across the globe (if not majority) still tend to focus on earnings management to a rather large extent. Which of the company valuation methods provides an explanation on such practice?

Select one:

a. Constant Growth Model method

b. Market to Book Ratio method

c. Income Statement method

d. Balance Sheet method

e. Discount Cash Flows method