a - 1.

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. The business cycle has become more volatile over the past 20 years. Industries like the  automotive sector must reflect this cyclicality in their estimates of future profits and cash  flows. 2. To the extent that a firm is impacted by business cycles, it should be expected to yield a  higher average rate of return over the long term than one that is not so cyclically impacted. 3. According to the New Paradigm, many formerly cyclical firms are losing that cyclicality as  competition increases in their markets.   4. As an industry experiences an increasing degree of competition, estimates of revenue should  be more moderate than if competition in that industry was decreasing.   5. Given the increasingly competitive nature of many markets in the U.S., if the value analyst  uses alternative scenarios for future estimates, estimates based on moderate revenue  assumption should be given greater weights than those presuming more profitable pricing 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/05/2011 for the course ACC 134 taught by Professor Erik during the Fall '11 term at Colorado.

Page1 / 3

a - 1.

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online