Under what conditions is this a good forecast

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Reference no: EM131491168

Question: 1. A valuation that simply capitalizes a forecast of operating income for the next year implicitly assumes that residual operating income will continue as a perpetuity. Is this correct?

2. An analyst forecasts that next years core operating income for a firm will be the same as the current years core operating income. Under what conditions is this a good forecast?

Reference no: EM131491168

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