Anticipated favorable changes in the six variables

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Reference no: EM131247414

According to the valuation model [(15.25)] with finite supernormal growth and corporate taxes, there are six variables that affect the value of the firm.

a) What are they?

b) Why cannot the president of a firm cause the firms market value to increase simply by reporting anticipated favorable changes in the six variables, e.g., an increase in expected return on investment?

Reference no: EM131247414

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