datacamp-logo

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?

Answer the question
50 XP
Possible Answers
  • press
  • press
  • press
  • press