Series 79 practice questioneasyComparable Company Analysis
Which of the following characteristics is most important when selecting peers for a comparable company analysis?
- AGeographic presence
- BStock exchange listing
- CDividend history
- DBusiness model and industry focus✓ Correct answer
Explanation
Why D — Business model and industry focus
Companies in the same industry with a similar business model provide the most meaningful comparisons. Overlooking this could result in distorted multiples due to differing growth, risk, or profitability profiles.
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