When valuing a firm's stocks and bonds, finance professionals place equal significance on accounting results and cash flows.

Question

Quizplus · Accepted Answer

Finance professionals generally place more importance on cash flows than accounting results when valuing a firm's stocks and bonds, as cash flows are a more reliable indicator of a company's financial health and ability to generate returns for investors. Accounting results can be manipulated through various accounting practices, which can make them less reliable.

When Valuing a Firm's Stocks and Bonds, Finance Professionals Place