Estimating Company Earnings per Share | CFA Level 1 Exam | Test Prep

Estimating Company Earnings per Share

Prev Question Next Question

Question

Estimating company earnings per share is a function of the ________ and the ________.

Answers

A. firm's historical sales levels; relationship between sales and various relevant economic and industry series

B. firm's internal performance; problems that might affect its future performance

C. firm's competitive strategy; the firm's relationship with the industry

D. sales forecast; estimated profit margin

E. historical earnings per share; historical earnings multiplier D

Show Answer

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

Explanation

The future value of a stock is derived by predicting the stock's earnings per share and expected earnings multiplier. Expected earnings per share is a function of the sales forecast and the estimated profit margin.

Prev Question Next Question