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Which investors willingly pay a premium for the firms that

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Reference no: EM132893281

Problem 1: Under the abnormal earnings approach of equity valuation, investors willingly pay a premium for those firms that:

Group of answer choices

Option 1: produce negative abnormal earnings.

Option 2: earn an amount equal to the equity cost of capital.

Option 3: produce positive abnormal earnings.

Option 4: earn less than the cost of equity capital.

Reference no: EM132893281

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