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Author Question: Which of the following statements regarding market multiple analysis is correct? (Read 121 times)

sreghbsidhgjbndskijgnio

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Which of the following statements regarding market multiple analysis is correct?

While the market multiple analysis applies valuation concepts in a precise manner, focusing on expected cash flows, the discounted dividend method is more judgmental.


Market multiple analysis applies a market-determined multiple to net income, earnings per share, sales, book value, or, for businesses such as cable TV or cellular telephone systems, the number of subscribers.


The EBIT multiple is based on total value since EBIT measures the entire firm’s performance. So, it is called an entity multiple.


We can estimate a company’s total value by dividing the company’s EBITDA by its market multiple.



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Marked as best answer by sreghbsidhgjbndskijgnio on Aug 7, 2023

Asfa

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sreghbsidhgjbndskijgnio

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review


rachel

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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