Series 79 practice questionmediumComparable Company Analysis
Which of the following should be considered when selecting peer companies for a comparable company analysis in the tech sector?
- AOnly companies with identical ticker symbols
- BOnly companies within the same city
- CCompanies with similar business models and growth profiles✓ Correct answer
- DThe last traded price of the company's stock
Explanation
Why C — Companies with similar business models and growth profiles
Peer sets should reflect comparable business models and growth, not geography or ticker. Choosing based on price or location leads to irrelevant comparables and valuation errors.
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