AB

问题如下：

Q. The most appropriate response to Wright’s question about the technological development is to:

选项：

A.increase the required return. B.decrease the perpetual growth rate. C.decrease the price-to-earnings multiple.

解释：

C is correct. If the future growth or profitability of a company is likely to be lower than the historical average (in this case, because of a potential technological development), then the target multiple should reflect a discount to the historical multiple to reflect this difference in growth and/or profitability. If a multiple is used to derive the terminal value of a company, the choice of the multiple should be consistent with the long-run expectations for growth and required return. French tells Wright he believes that such a technological development could have an adverse impact on Archway beyond the forecast horizon.