A Problem with Valuing a Target Using P/E Ratios Is

A problem with valuing a target using P/E ratios is:

A) the assumption that risk differences between the bidder and target can be captured in the discount rate.
B) the assumption that 'future maintainable earnings' can represent a company's future earnings.
C) the assumption that the risk of the target can be fully captured in the discount rate.
D) all of the given options.

Correct Answer:

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