Economics · Business Valuation
When valuing a business using the Price/Earnings (P/E) ratio method, an ideal comparable listed company should possess:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A much higher growth rate and a lower risk profile than the target company
- 2A much lower profit history but an identical industry classification
- 3A similar industry classification, growth prospects, and risk profile✓
- 4A diverse business portfolio operating in completely different geographical regions
Correct answer
A similar industry classification, growth prospects, and risk profile
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