You want to use the pure play approach to assign a cost of capital to a proposed investment.Which one of the following characteristics should you most concentrate on as you search for an appropriate pure play firm?

Question

Quizplus · Accepted Answer

The pure play approach involves finding a firm that operates in the same line of business as the proposed investment. Therefore, the focus should be on firm operations to ensure the firm is a suitable match for the investment's risk profile.

You Want to Use the Pure Play Approach to Assign