Limitations in Applying the Comparable Companies' Method of Valuation Include

Multiple Choice

Limitations in applying the comparable companies' method of valuation include which of the following?

A) Finding truly comparable companies is difficult

B) The use of market-based methods can result in significant under- or overvaluation during periods of declining or rising stock markets
C) Market-based methods can be manipulated easily, because the methods do not require a clear statement of assumptions with respect to risk, growth, or the timing or magnitude of future earnings and cash flows.
D) A, B, & C
E) A & B only