You need 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 publicly-traded company that is solely focused on the same operations as the proposed investment. Therefore, the most important characteristic to consider when searching for a pure play firm is the firm's operations, as it should match the operations of the proposed investment as closely as possible.

You Need to Use the Pure Play Approach to Assign