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Which firm financial statements is more relevant

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Question - Firm A and Firm B are the same size and have similar capital structures and similar betas. Firm A is a growth firm that uses very conservative accounting policies. Firm B is growing slowly and uses fair value accounting for its capital assets and related amortization.

Identify and explain three dimensions of reliable financial statement information.

Which firm's financial statements is more reliable?

Which firm's financial statements is more relevant? When conditions are not ideal, can we increase both relevance and reliability? Explain.

Both firm A and Firm B report the same GN in earning this year. Which firm would you expect to have the greater security market response (ERC) to this good earning news? Explain why?

Reference no: EM132850030

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