In estimating continuing value, how does assuming that RONIC is equal to WACC affect the importance of assumptions concerning growth? O Assumptions concerning growth become unimportant when RONIC - WACC. O Assumptions concerning growth do not change in importance. O Assumptions concerning growth become more important when RONIC WACC. Assumptions concerning growth become less important when RONIC - WACC but are still important.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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In estimating continuing value, how does assuming that RONIC is equal to WACC affect the
importance of assumptions concerning growth?
Assumptions concerning growth become unimportant when RONIC WACC.
-
Assumptions concerning growth do not change in importance.
Assumptions concerning growth become more important when RONIC = WACC.
Assumptions concerning growth become less important when RONIC WACC but are still important.
-
Transcribed Image Text:In estimating continuing value, how does assuming that RONIC is equal to WACC affect the importance of assumptions concerning growth? Assumptions concerning growth become unimportant when RONIC WACC. - Assumptions concerning growth do not change in importance. Assumptions concerning growth become more important when RONIC = WACC. Assumptions concerning growth become less important when RONIC WACC but are still important. -
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