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Last sentence of LOS 27.b in Schweser FRA, pg. 175, states:
“…If an investor fails to assign a lower weighting to the accrual component of the earnings, securities become mispriced.”
What exactly is the weighting in this case? Conceptually, cash flows are better indicator of a firm’s state of health - and therefore minimizes mispricing during valuation. But let’s say if an analyst uses relative valuation, i.e. P/E then s/he is forced to use the accrual part of NI - what does weightage has to do with the valuation? |
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发表于 2013-4-17 17:18
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