Valuation of financial assets requires knowledge of:
A) future cash flows.
B) appropriate discount rate.
C) past asset performance.
D) future cash flows and appropriate discount rate.

Question

Quizplus · Accepted Answer

Valuation of financial assets involves predicting future cash flows and then discounting them to determine their present value, which requires the knowledge of both future cash flows and appropriate discount rate. Past asset performance may be considered, but it is not sufficient for valuation.

Valuation of Financial Assets Requires Knowledge Of