Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)Because capital expenditures can vary substantially from period to period,most practitioners rely on enterprise value to free cash flow multiples.
• B)Common multiples to consider are enterprise value to EBIT,EBITDA,and free cash flow.
• C)If two stocks have the same payout and EPS growth rates as well as equivalent risk,then they should have the same P/E ratio.
• D)Looking at enterprise value as a multiple of sales can be useful if it is reasonable to assume that the firms will maintain similar margins in the future.

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Definitions:

Fireflies

Bioluminescent beetles known for their ability to emit light through chemical reactions in their lower abdomen, used for communication and mating.

Social Animals

Animals that live in structured groups or societies, exhibiting cooperative behavior and complex interactions.

Eusocial Animals

Animals that live in complex, cooperative groups in which not all individuals reproduce, including many insects like bees and ants.

Commercial Ship Traffic

The movements of commercial vessels in waterways, crucial for global trade but also a concern for environmental and safety factors.