Market Based Valuation multiples are based on finding comparable companies. Discuss the various approaches you can use to construct a group of comparable companies, and the strength and weaknesses of each approach.

Please answer the following questions and make sure you write a clear answer with a clear explanation. Thank you in advance.

1-The concept of terminal value is an important feature of both the Divided Discount Model and the Free Cash Flow Model we have examined so far. Discuss the problems associated with using terminal value, and how the Residual Income Model can be used to reduce some of those problem.

2-Define the concept of the PEG ratio, and show 2 examples. What levels of PEG ratio are commonly accepted as showing a stock to be unevaluated?

3- Discuss whether the following statement is true or false, and give you reason.
Since Earning per share (EPS) is the most widely used factor in equity valuation, a company that has negative or zero earning per share should have stock price of $0 per share

4- Market Based Valuation multiples are based on finding comparable companies. Discuss the various approaches you can use to construct a group of comparable companies, and the strength and weaknesses of each approach.

5- In calculation per share values, we often use the fully diluted number of shares. Define fully diluted, and give 4 examples of common sources of diluted, and how you would adjust the number of shares.

6-The market based valuation model we have studied, such as Price to Earning and Price to Revenue, are based on the economic principle of the Law of One Price. What is the Law of One Price,