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Author Question: The price-to-cash-flow method of stock valuation generally (Read 47 times)

isam

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Question 1

For which one of the following situations will the price-to-sales valuation model work but the dividend and cash flow models will not?
◦ mature firm with minimal growth opportunities
◦ water-powered electric utility company
◦ newly-formed biotechnology company with negative earnings
◦ top-performing firm in a mature industry

Question 2

The price-to-cash-flow method of stock valuation generally
◦ uses either EBITDA or operating cash flow from the cash flow statement as a measure of cash flow.
◦ relies on historical cash flows.
◦ produces a cash flow multiple that is greater than the P/E multiple.
◦ applies the P/E multiple to the cash flow per share value.


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Marked as best answer by isam on Mar 29, 2022

mgranuc

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isam

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Reply 2 on: Mar 29, 2022
Thanks for the timely response, appreciate it


Joy Chen

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Reply 3 on: Yesterday
Wow, this really help

 

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