A weakness of the PE approach to valuing stock is that it is
A. difficult to estimate the constant growth rate of a firm’s dividends.
B. difficult to estimate the required return on equity.
C. difficult to predict how much a firm will pay in dividends.
D. based on industry averages rather than firm-specific factors.
Answer:D
A weakness of the PE approach to valuing stock is that it is
A. difficult to estimate the constant growth rate of a firm’s dividends.
 B. difficult to estimate the required return on equity.
 C. difficult to predict how much a firm will pay in dividends.
 D. based on industry averages rather than firm-specific factors.
