Question

If you were using the discounted cash flow method to determine the appropriate value of a security, you would want to purchase that security when A) the current market price equals the PV B) the current market price is below the PV C) the rating of the security has just been upgraded D) the current market price is above the PV

Answer 1

Answer: The current market price is below the PV

Step-by-step explanation:

The discounted cash flow method is when the time value of money is being used to value a project, security, company, or an asset.

When the discounted cash flow method is used to determine the appropriate value of a security, it is vital to buy the security when the current market price is below the present value.