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Difference in Implied Values

In the prior exercise, the regression analysis of P/B multiples on ROE implies a value of $29.82 for the subject Consumer Discretionary firm. Suppose that using the average P/B multiple of Consumer Discretionary firms (i.e., the analysis in the first part of this chapter), you get an implied value of $32.38. What could be a cause of the difference between these two approaches?

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Equity Valuation in R

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