Does his recommendation agree with his forecast

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Question: 1. A share trades at a price-to-book ratio of0.7. An analyst who forecasts an ROCE of 12 percent each year in the future, and sets the required equity return at 10 percent, recommends a hold position. Does his recommendation agree with his forecast?

2. Comment on the following: "ABC Company is generating negative free cash flow and is likely to do so for the foreseeable future. Anyone willing to pay more than book value needs their head read."

Reference no: EM131487768

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