HWA 2
McKinzie Henson
7/6/2017
Discussion Questions
1. Influential variables consist of the following: earnings and sales growth of the firm, risk of
instability in performance, the dividend payment policy, and the quality of management.
2. Book value is based on the historical cost of the assets. Market value per share is based on
current assessed value of the firm in the marketplace and could have little to no relationship
with the original cost. Besides the difference between book and market value caused by the
historical cost approach, other contributing factors are the growth prospects for the firm, the
