The franchise P/E is a function of
A) Relative rate of return on new business opportunities
B) Size of superior return opportunities.
C) Duration of earnings growth.
D) a and b
E) a, b and c

Question

Quizplus · Accepted Answer

The franchise P/E is a function of the relative rate of return on new business opportunities and the size of superior return opportunities, as they impact the growth and earnings potential of the franchise. While the duration of earnings growth is a factor that can influence the franchise P/E, it is not as significant as the other two factors mentioned. Therefore, the correct answer is D.

The Franchise P/E Is a Function of