Estimating a firm's forward looking EPS is considered to be easier than determining an appropriate price-earnings multiple to be used in a valuation process.

Question

Quizplus · Accepted Answer

Estimating forward-looking EPS involves projecting future earnings based on historical data and trends, which can be more straightforward than determining the appropriate P/E multiple, as the latter requires assessing market conditions, industry comparisons, and investor sentiment, which are more subjective and variable.

Estimating a Firm's Forward Looking EPS Is Considered to Be