Author Question: Which of the following statements regarding market multiple analysis is correct? (Read 89 times)

sreghbsidhgjbndskijgnio · **on:** Aug 7, 2023

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

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

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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.

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

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

Asfa · **Reply #1 on:** Aug 7, 2023

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