Share valuation is more precise than bond valuation as share cash flows are more certain.

Question

Quizplus · Accepted Answer

The statement is false. Share cash flows are generally less certain than bond cash flows, which makes share valuation less precise than bond valuation. Bond holders have a fixed cash flow at predetermined intervals, whereas shareholders rely on the performance of the company, which can be influenced by various external factors.

Share Valuation Is More Precise Than Bond Valuation as Share